Chile’s LAN and the Brazilian TAM took a new step to finalize the creation of the largest airline in Latin America. Yesterday they announced the signing of a binding agreement between the two companies and their controlling shareholders, which now only remains to get approval from part of antitrust agencies. In companies they expect that operation is completed within a period of between six and nine months. The new airline resulting from the operation will be called Latam and shall have its legal seat in Santiago of Chile. The stock package will also remain in Chilean hands. The new company will provide services of transportation of passengers and cargo to more than 115 destinations in 23 countries, operating through a fleet of more than 280 aircraft and will have more than 40,000 employees and a turnover of more than US $8500 million annually. However, both LAN and TAM will maintain their individuality as trademarks. In Argentina, LAN providing cabotage services international, while TAM operates flights International.
Both companies had signed a memorandum of understanding non-binding on August 19, 2010, that just be ratified through an official statement to Brazil, Chile, and New York stock markets. They will be able to offer new destinations that no company could have done on their own. This will allow us to compete with foreign companies that are continuing to increase services in our region, while we generate new jobs in our countries, said the President of TAM, Marco Bologna. For his part, his pair of LAN, Enrique Cueto, noted: with this combination we take two Latin American leaders and create a global leader that enorgullecera to Latin Americans. LatAm will keep the actions listed in the Santiago values Exchange, the Bovespa of Sao Paulo and ADRS on the New York Stock Exchange, while those of TAM will come out of the markets. Due to strong regulations that exist in Brazil in the field of ownership of companies in foreign hands, the agreement also provides for a Special stock distribution scheme.
On the one hand, the Amaro family, owner of TAM, will create a company in partnership with LAN, called Holdco1, and on the other, a firm called Holdco Sister in Chile. At the same time, Holco1 will create a new company, called Holdco2, that will be the vehicle for the Amaro family effective exchange of shares in TAM by LAN, together with Holdco Sister intended to change actions of other minor of the Brazilian company owners. Towards the end of the Exchange, Holdco2 and Sister Holdco will be merged with LAN and becomes to be renamed Latam, whose property will be distributed between current shareholders drivers LAN, with 24,07%, TEP Chile (family Amaro) with 13,67%; other minority shareholders from LAN (46.6%) and TAM (15.65 percent) shareholders.