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Chile-Brazil airline merger to be completed in 2012

(Xinhua)

11:07, September 25, 2011

SANTIAGO, Sept. 22 (Xinhua) -- The head of Chile's airline group LAN said Thursday his company's merger with Brazilian airline TAM will be completed in the first quarter of 2012 after some "minor formalities" of the deal are solved.

"We are in agreement," LAN Chairman Ignacio Cueto said.

Once completed, the merger will create the largest airline in the South American region and the 11th largest in the world based on passenger numbers.

Cueto's announcement came after the official approval of the merger by Chile's Tribunal for the Defense of Free Competition.

"The LAN-TAM merger will help achieve a greater Latin American integration and the development of tourism," said Cueto.

Although shares of LAN, one of the main companies quoted at the Santiago Stock Exchange, rose upon the merger approval news late on Wednesday, shares of the airline closed down 0.57 percent after the conditions imposed by the tribunal were made public.

By midday Thursday, LAN shares were down 4.63 percent and were traded at 12,350 Chilean pesos (24.7 U.S. dollars) per share.

Brazilian anti-monopoly regulatory authorities have yet to approve the merger as well, but it is expected to come between the last week of October and the first week of November, the Brazilian anti-trust commission said last month.

Financial analysts estimated the combined stock market value of the new LAN-TAM airline to be about 12.14 billion dollars.

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