LAN Sees TAM Merger Beginning Mid-2011
Chile's LAN expects its planned merger with Brazil's TAM to clear regulatory hurdles and take flight in mid-2011, an executive of the Chilean airline said in a radio interview.
"We hope by the middle of next year to be on solid ground to begin working together," LAN Chief Operating Officer Ignacio Cueto told local radio Duna in comments available on the radio's website on Friday.
The Cueto family is the main shareholder of LAN, considered one of Latin America's most profitable airlines.
Both airlines announced their merger plans in August and are waiting for regulatory approval in their countries. Analysts say LAN is effectively acquiring the Brazilian airline as the Cueto family is set to emerge with the biggest stake in what would be one of the world's top carriers.
The Cuetos transferred their LAN shares into a new holding company via a public offering on Friday, in what they said was a move to simplify their shareholders structure ahead of the merger with TAM. The family used the public offering to transfer the shares to take advantage of tax breaks, local media said.
Local media has reported Chilean authorities are worried that the new LATAM Airlines Group could end up with nearly complete control over the Santiago-Sao Paulo route after the merger. Still, experts have said approval is likely in both countries.