Delta, LATAM Airlines To Form Leading Airline Partnership In America

 

 

…To Serve 435 Destinations Worldwide, Carry More Passengers Between North, Latin America

Delta and LATAM Airlines Group S.A. (LATAM) have signed a strategic partnership that would for the first time combine the strengths of the leading airlines in North and Latin America.

According to the Delta Air Lines Chief Executive Officer, Ed Bastian, “This transformative partnership with LATAM will bring together our leading global brands, enabling us to provide the very best service and reliability for travelers to, from and throughout the Americas,”

“Our people, customers, owners and communities will all benefit from this exciting platform for future growth.”

Also speaking, the Chief Executive Officer of LATAM, Enrique Cueto Plaza, said, “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,”

“We look forward to working alongside one of the world’s best airlines to enhance the travel experience for our passengers.”

The strategic partnership will unlock new growth opportunities, building upon Delta’s and LATAM’s global footprint and joint ventures worldwide, including Delta’s existing partnership with Aeroméxico.

With their complementary networks, Delta, LATAM and their partners will be able to offer access to a greatly expanded array of worldwide destinations.

Together, the partnership will provide greater customer convenience, a more seamless travel experience and better connect customers with the rest of the world.

* Pix swift: Skift

Additional details of the partnership include:

  • Delta will invest $1.9 billion for a 20 per cent stake in LATAM through a public tender offer at $16 per share, to be funded principally with newly issued debt and available cash.
  • Delta will also invest $350 million to support the establishment of the strategic partnership.
  • Delta will acquire four A350 aircraft from LATAM and has agreed to assume LATAM’s commitment to purchase 10 additional A350 aircraft to be delivered beginning in 2020 through 2025, supporting Delta’s ongoing fleet transformation.
  • Delta will be represented on LATAM’s Board of Directors, further strengthening the relationship.

The tender offer and the strategic partnership are subject to customary closing conditions and all required governmental and regulatory approvals, including anti-trust immunity.

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.

For LATAM, the transaction will improve free cash flow generation, reduce forecasted debt by over $2 billion by 2025 and improve LATAM’s capital structure, enhancing its ability to execute its long-term strategy.

Meanwhile, Delta will hold a live conference call and webcast to discuss the agreement tomorrow, Friday, September 27, 2019 at 8:30 a.m. ET.

A live webcast of this event will be available at ir.delta.com. An online replay will be available at the same site shortly after the webcast is complete.

In the vein, LATAM will also hold a live conference call and webcast to discuss the agreement tomorrow; on Friday, September 27, 2019 at 10:00 a.m. ET and a live webcast of this event will be available at www.latamairlinesgroup.net/investor-overview

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