Delta to Acquire 20% Stake in Latam, Latin America’s Largest Airline

By Jesse Sokolow on 26 September 2019
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A Latam aircraft at JFK

A Latam aircraft at JFK

Delta Air Lines and Latam Airlines Group announced that the two have formed a partnership.

The move, the airline said, will leverage Delta’s transborder joint venture with Aeromexico, which launched two years ago.

Latam Airlines Group is a Chilean holding company headquartered in Santiago. It has subsidiaries in Argentina, Brazil, Colombia, Ecuador, Paraguay, and Peru.

Under the terms of the partnership agreement, Delta will invest $1.9 billion for a 20% stake in Latam, and it will invest $350 million to establish the partnership.  Delta will fund the investment with a public tender offer of $16 per share. Following the closing of the transaction, Delta will have a seat on Latam’s board of directors.

In addition, Delta will acquire four Airbus A350 aircraft from Latam and assume its commitment to acquire ten more A350s that will be delivered from 2020 to 2025.

The partnership as well as the tender offer are subject to customary closing conditions and government and regulatory approvals.

Delta said that the transaction will free up cash for Latam while reducing that airline’s debt.

(Photo: Accura Media Group)

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