Highlights of the Transaction

LAN Airlines S.A. (LAN) and TAM S.A. (TAM) announced that they have entered into a non-binding Memorandum of Understanding (MOU) that outlines their intentions to combine their holdings under a single parent entity.

The combination of LAN and TAM would create a new Latin American airline group that would offer seamless passenger and cargo service across the continent and around the world. 

The new group, to be known as LATAM Airlines Group, would include LAN Airlines and its affiliates in Peru, Argentina and Ecuador; Lan Cargo and its affiliates; TAM S.A.; TAM Mercosur and all other holdings of LAN and TAM.

LAN and TAM would continue to operate under their existing operating certificates and brands. Each airline within the group would maintain its current headquarters in Santiago and Sao Paulo.

Growth enabled by the transaction would reach new destinations, create more opportunities for employees of both companies and more value creation for shareholders and would foster economic development and job growth in the home countries of the group airlines and the countries they serve.

The group would be among the leading airline groups in the world in terms of size, profitability and market reach.

The transaction is subject to both parties entering into a binding definitive agreement and satisfaction of conditions, including corporate and shareholder approvals and actions and regulatory approvals.