Tag Archives: A7-AMA

Delta to buy 20% of LATAM and form a new airline partnership throughout the Americas

Delta Air Lines has made this announcement:

  • Partnership brings together the leading airlines in North America and Latin America, connecting the Americas to the world as never before.
  • Together, Delta and LATAM will hold the leading position in five of the top six Latin American markets from the U.S.
  • Together, the partners will serve 435 destinations worldwide and carry more passengers between North America and Latin America than any other partnership.
  • Customers will benefit from significantly expanded travel choices across the Americas and an industry leading customer experience.

Delta and LATAM Airlines Group S.A. have announced that they have entered into a strategic partnership that for the first time combines the strengths of the leading airlines in North and Latin America.

The strategic partnership will unlock new growth opportunities, building upon Delta’s and LATAM’s global footprint and joint ventures worldwide, including Delta’s existing partnership with Aeroméxico. With their complementary networks, Delta, LATAM and their partners will be able to offer access to a greatly expanded array of worldwide destinations. Together, the partnership will provide greater customer convenience, a more seamless travel experience and better connect customers with the rest of the world.

LATAM's PR-XTG leased to Qatar Airways as A7-AMA on February 21, 2017

Above Copyright Photo: LATAM Airlines (Brazil) Airbus A350-941 A7-AMA (PR-XTG) (msn 079) MUC (Arnd Wolf). Image: 937262.

Additional details of the partnership include:

  • Delta will invest $1.9 billion for a 20 percent stake in LATAM through a public tender offer at $16 per share, to be funded principally with newly issued debt and available cash.
  • Delta will also invest $350 million to support the establishment of the strategic partnership.
  • Delta will acquire four A350 aircraft from LATAM and has agreed to assume LATAM’s commitment to purchase 10 additional A350 aircraft to be delivered beginning in 2020 through 2025, supporting Delta’s ongoing fleet transformation.
  • Delta will be represented on LATAM’s Board of Directors, further strengthening the relationship.
  • The tender offer and the strategic partnership are subject to customary closing conditions and all required governmental and regulatory approvals, including anti-trust immunity.

Delta expects that the transaction will be accretive to EPS over the next two years. In addition, the transaction will not impact the company’s existing financial commitments to shareholders, including free cash flow and shareholder returns. Delta also expects to remain within targeted leverage ratios.

For LATAM, the transaction will improve free cash flow generation, reduce forecasted debt by over $2 billion by 2025 and improve LATAM’s capital structure, enhancing its ability to execute its long-term strategy.

LATAM (Brazil) aircraft photo gallery: