ANA Holdings Inc., owner of Japan’s biggest airline, announced Monday it would buy an 8.8 percent stake in Vietnam Airlines Corp., to take advantage of growing travel demand in Southeast Asia. The deal, valued at $108 million, also netted ANA a seat on the Vietnamese airline’s board of directors.

The deal is expected to close between March and June and is part of a 2014 initiative by the Vietnamese government to privatize most of the country’s state-owned enterprises and boost its $184 billion economy. The massive privatization drive has reportedly come under criticism for being sluggish and failing to attract investor interest in the last year.

Hanoi-based Vietnam Airlines, which raised $51.3 million in an initial public offering in November 2014, was unable to attract a single foreign institutional investor at the time of its IPO. According to the Vietnamese government's so-called equitization plan for the airline released in 2014, it hoped to sell a further 20 percent stake to strategic partners after the IPO.

ANA’s deal with Vietnam Airlines also included code-share agreements on certain routes between Vietnam and Tokyo, which means both airlines will now be able to sell some tickets of each other’s flights to expand their networks. The two airlines would also combine some of their operations in aircraft maintenance, catering and ground handling at airports where they both have a presence.

“Asia is a key growth market for ANA Group as we expand our international footprint and Vietnam Airlines makes the ideal partner for us ... We look forward to completing this strategic investment and launching our partnership so we can serve our passengers even better,” Shinya Katanozaka, CEO of ANA Holdings, said in the statement. 

ANA would also share operational and management know-how to help improve service quality, the companies said in a statement. Shares of the Japanese carrier were trading down 2.64 percent on the Tokyo Stock Exchange Tuesday.

ANA and its main airline unit All Nippon Airways Co. have been reportedly looking to buy stake in airlines in Southeast Asian region after raising $1.4 billion in 2012 for the purpose. In 2014, the company scrapped a $25 million deal to buy a 49 percent stake in Myanmar’s Asian Wings Airways citing increased competition in the region.