Swiss airline catering company Gategroup Holding said it would buy Air France KLM's catering business Servair for €237.5m, including debt.
The deal will create the world's leading inflight catering group.
After the deal, Gategroup will be serving more than 300 airlines and expects annual revenue to exceed 4.4 billion Swiss francs ($4.29 billion), the group said in a statement.
The enterprise value of €237.5m is based on a 50% stake in Servair, Gategroup said.
Air France-KLM said in May it was entering exclusive negotiations with Gategroup's parent Chinese aviation and shipping conglomerate HNA Group to sell a stake in Servair and transfer operational control to HNA.
Gategroup said it would finance the acquisition initially through a bridge facility which would be replaced by a capital market transaction likely to be in the first half of 2017.
HNA Group bought Gategroup in a $1.5 billion deal earlier this year.