LAN acquires TAM, becomes the LATAM Airlines Group

LAN Airlines S.A. (Santiago) (which has been renamed LATAM Airlines Group S.A.) and TAM S.A. (Sao Paulo) on June 22 completed their exchange offer. The acquisition has created the LATAM Airlines Group S.A. LATAM Airlines Group S.A. will offer passengers more flights to more destinations than any other affiliated group of airlines in South America, initially reaching about 150 destinations in 22 countries and transporting cargo to 169 destinations in 27 countries.

As previously announced, the transaction was carried out through an exchange offer in which TAM’s shareholders could elect to exchange their TAM shares for LAN shares at a ratio of 0.9 LAN shares for each TAM share. The offered LAN shares will be delivered in the form of BDRs (Brazilian Depositary Receipts) in Brazil and ADRs (American Depositary Receipts) in the United States. The exchange offer, which was materialized with the auction on June 22, 2012, was subject to the condition that more than 2/3 of the TAM shares that participate in the offer agree with the deregistration of TAM as a public company in Brazil. This delisting condition was satisfied when 99.9% of the participant shares agreed with TAM’s deregistration. The tendered shares together with the TAM shares committed by the TAM Controlling Shareholders represented 95.9% of the total outstanding shares of TAM.

According to this report by Reuters, LATAM Airlines will decide within the next six months which airline alliance it will stay with. Currently LAN is a member of the OneWorld alliance, while TAM belongs to Star Alliance.

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Top Copyright Photo: Alvaro Romero.

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Bottom Copyright Photo: Marcelo F. De Biasi.