Airlines Delta Air Lines to buy 20 percent of LATAM

Delta Air Lines has announced, that it plans to purchase a 20 percent stake in LATAM through a public tender offer.

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As one of the largest airlines in the world, Delta Air Lines is furthermore expanding its business. With a 20 percent stake in LATAM, the carrier strengthens its presence in Latin America. In total, the U.S.-American airline will invest US$1.9 billion.

The deal will bring together two leading airlines in North America and Latin America. Delta and LATAM stated, that the plan is to hold the leading position in five of the top six Latin American markets from the U.S. The deal will be a Joint Venture (JV) between the carriers.

Together, Delta and LATAM serve over 430 destinations around the world. It currently is the strongest airline partnership that carries passengers between North America and Latin America.

“This transformative partnership with LATAM will bring together our leading global brands, enabling us to provide the very best service and reliability for travellers to, from and throughout the Americas,” said Ed Bastian, Delta’s Chief Executive Officer. “Our people, customers, owners and communities will all benefit from this exciting platform for future growth.”

“This alliance with Delta strengthens our company and enhances our leadership in Latin America by providing the best connectivity through our highly complementary route networks,” said Enrique Cueto Plaza, Chief Executive Officer of LATAM. “We look forward to working alongside one of the world’s best airlines to enhance the travel experience for our passengers.”

The airlines stated, that the strategic partnership would unlock new growth opportunities. Delta currently has an existing partnership with Aeroméxico and hopes to offer a greater access to worldwide destinations with these combined networks. Ultimately, passengers will experience more seamless connections said Delta.

Included in the deal is the acquirement of four A350 XWB aircraft from LATAM. Moreover, Delta has agreed to assume LATAM´s commitment to purchase 10 additional A350 XWB aircraft. These widebodies are expected to be delivered between 2020 and 2025.

Regarding the circumstances, Delta wrote: "Delta expects that the transaction will be accretive to EPS over the next two years. In addition, the transaction will not impact the company’s existing financial commitments to shareholders, including free cash flow and shareholder returns. Delta also expects to remain within targeted leverage ratios."

Delta Air Lines is a major U.S.-American carrier that serves nearly 200 million people every year. The headquarters are in Atlanta, where the airline operates a major hub as well. The fleet includes more than 900 aircraft.

LATAM Airlines Group S.A. is the leading Latin American airline group that offers services to 143 destinations in 25 countries. In total, the group has 322 aircraft in its fleet including modern planes like the A320neo and A350.

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