LAN-TAM Merger Reflects Growing Latin American Solidarity
In what might prove the biggest cross-border airline merger ever between two
Brazil’s TAM over the summer placed a new order for 20 Airbus A320-family aircraft–bringing its total to 134–and Chile’s LAN signed an MOU for 50 of the European twinjets. Together, the airlines would operate a fleet of 220 airplanes to 115 destinations. (Copyright Airbus)
Brazil’s TAM over the summer placed a new order for 20 Airbus A320-family aircraft–bringing its total to 134–and Chile’s LAN signed an MOU for 50 of the European twinjets. Together, the airlines would operate a fleet of 220 airplanes to 115 destinations. (Copyright Airbus)

In what might prove the biggest cross-border airline merger ever between two Latin American airlines, Chile’s LAN and Brazil’s TAM plan to form the world’s 10th largest carrier (in terms of passenger numbers) under a non-binding memorandum of understanding signed August 13. The new group, to operate as LATAM Airlines Group, would include LAN Airlines and its affiliates in Peru, Argentina and Ecuador; LAN Cargo and its affiliates; TAM Lineas Aereas S.A., TAM Mercosur and all other holdings of LAN and TAM.

The all-stock transaction would consolidate the economic interests of LAN and TAM under a single parent while satisfying the foreign ownership and control requirements of each country where they operate. TAM shareholders would receive nine-tenths of a share of common stock of LATAM for each share of TAM.