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LAN Airlines and TAM announce binding agreements

20-Jan-2011 10:33 AM

LAN Airlines and TAM announced (19-Jan-2011) the signing of binding agreements between the companies and their respective controlling shareholders, in line with the MoU signed on 13-Aug-2010. These binding agreements, include an implementation agreement and an exchange offer agreement containing the definitive terms and conditions of the proposed business merger of LAN and TAM. This transaction remains subject to approval of Agência Nacional de Aviação Civil of Brazil (ANAC) and other relevant government authorities. LAN’s name will be changed to “LATAM Airlines Group SA” (LATAM), and the share capital of LAN will be distributed approximately as follows (assuming a 100% of the holders of TAM stock, other than the Amaro family, tender their shares into the Exchange Offer):

  1. LAN controlling shareholders, 24.07%;
  2. TEP Chile, 13.67%;
  3. Other existing shareholders of LAN, 46.60%;
  4. Tendering holders of TAM stock, 15.65%.

Upon consummation of the transaction, LAN, TAM and their respective subsidiaries will continue their airline operations as usual. The Chairman of the Board of LATAM will be Mauricio Rolim Amaro. Enrique Cueto will remain CEO of LATAM and Ignacio Cueto will remain in his current capacity as President and Chief Operating Officer of LAN’s operations. The Chairman of the Board of TAM will continue to be Maria Claudia Oliveira Amaro, and the Chief Executive Officer Marco Bologna. Completion of the transaction is expected to take between six to nine months. The proposed combination of LAN and TAM as LATAM will produce an airline group that will be among the 10 biggest in the world. LATAM will provide transport services for passengers and cargo to more than 115 destinations in 23 countries, operating a fleet of more than 280 aircraft and employ more than 40,000. [more]