Update Lan Airlines (LFL)
posted on August 26, 2010 at 2:23 pm
This deal is a huge expansion for Lan Airlines (LFL) that will turn Chile’s national airline into a truly South American airline.
Lan will buy Brazil’s Tam (TAM) for $3.7 billion. Shareholders of Lan will own 70% of the combined company. (Tam will be delisted and the new shares for LATAM Airlines will trade in New York, Santiago, and Sao Paulo.)
The acquisition will make Lan, with strong routes and market share in Chile, Peru, Argentina, and Ecuador, a dominant player in the Brazilian market. (Tam had about 42% of the Brazilian domestic market as of the end of the second quarter of 2010.) Tam’s revenue last year of$4.9 billion was greater than Len’s revenue of $.37 billion.
I’ve got three reasons to like the deal. Read more
