Court Upholds LAN-TAM Takeover Measures
Chile's supreme court on Thursday rejected appeals by LAN Airlines and Brazil's TAM to lift competitiveness protections imposed on their merger by a local antitrust regulator, though LAN executives have said the measures wouldn't hold back the takeover.
LAN's takeover of TAM will create one of the world's largest carriers and is expected to be complete by mid-May.
The airlines appealed to Chile's supreme court in October over three of the 11 measures Chile's antitrust regulator imposed on the takeover relating to code-share agreements, obligations to give up some flights via Lima to other cities, and guaranteeing regulators access to all business records.
"It is impossible to ignore that the LAN-TAM merger has objective economic interdependence with other businesses, such as code sharing agreements," the supreme court said in its decision. "These are aspects of economic activity that anti-trust judges correctly included in their analysis."
LAN and TAM said in October they did not expect the conditions imposed on the merger would cost more than USD$10 million out of expected synergies. LAN initially estimated cost savings of around USD$400 million.
The airlines' merger could result in a higher-than-expected increase in pre-tax operational revenues of up to USD$700 million for the new carrier LATAM, TAM said in a securities filing in January.