LAN and TAM start share exchange process

This story is sourced from Pro
See more Pro news »

Chile's Oneworld carrier LAN and Brazil's Star Alliance member TAM have initiated today the exchange of their shares, which marks the beginning of the corporate merger process between South America's largest airlines that will create LATAM Airlines.

Earlier this week US and Brazilian stock exchange authorities authorised the LAN shares. The process will be executed through an intermediate company, Holdco II S.A., which will later merger with LAN.

According to a filing by LAN with the Santiago de Chile Stock Exchange supervisory authority SVS, the offer to exchange TAM shares for Holdco/LAN shares was initiated today at both stock exchanges where TAM is listed - Sao Paulo's Bovespa and the New York Stock Exchange.

The public offering is based on a 0.9:1 term, under which holders of TAM shares will receive 0.9 LAN shares for every share. The offer will conclude on 11 June and the final assignation of shares will take place on 12 June.

The merger, which is expected to generate cost savings and synergies of US$700 million will create the world's 11th largest airline by passenger numbers and a global cargo airline heavyweight.