Lan To Acquire Tam For $3.7B
Chile's Lan Airlines (NYSE: LFL), South America's largest carrier, will acquire Brazil's Tam SA (NYSE: TAM) for $3.7 billion in a deal that will allow Lan to boost its footprint in Brazil, Latin America's largest economy.
Lan shareholders will own 70% of the combined company and Tam investors will own the rest.
The announcement comes five months after Chile’s President Sebastian Pinera sold his 26 percent stake in Lan for $1.5 billion and after Lan shares doubled in the past year, according to Bloomberg News.
Tam had 2009 revenue of $4.9 billion compared with Lan’s $3.7 billion. Tam has 63 destinations in 14 countries while Lan has 70 destinations in 17 countries, Bloomberg reported.
The combined company will be based in the Chilean capital of Santiago and will be the 15th largest airline in the world based on revenue and the 11th largest by passengers.
JPMorgan Chase (NYSE: JPM) adivsed Lan on the purchase.
© 2017 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.