Delta To Acquire Minority Stake Of Brazil Airline Gol

SAO PAULO (Dow Jones)–U.S.-based Delta Air Lines Inc.’s (DAL) signed a binding agreement to buy a minority stake of Brazil’s second largest airline company in terms of revenues, Gol Linhas Aereas Inteligentes (GOL, GOLL4.BR), for $100 million, Gol said Wednesday.

Gol, which didn’t unveil the stake to be acquired by Delta, said that it will issue preferred shares in the form of American Depositary Shares, or ADS, to Delta.

“Delta Airlines Inc. will invest $100 million in exchange for ADSs representing Gol’s preferred shares through the issuance of preferred share with an issue price of 22.0 Brazilian reais ($12.25) per share. The total capital increase will be up to BRL280 million, including the subscription rights for all Gol’s shareholders. Gol’s board will deliberate on Dec. 21 to resolve the capital increase,” Gol said.

Under Brazilian legislation, local airline companies must be controlled by Brazilian hands.

Gol said it will increase its capital, and then its shares will be subscribed by Delta.

According to Gol, it expects to reinforce operational synergies with Delta after the agreement, including the expansion of code share agreements between both companies.

“The partnership with Delta is in line with the company’s strategy to create international partnerships with lead companies, in order to aggregate value for its passengers,” Gol said.

The Brazilian company also said that the agreement included the transfer of the lease of the two remaining Boeing 767 aircraft in Gol’s fleet and their spare parts to Delta.

“The transaction does not envisage Gol’s adherence to a Global Alliance, and it is aligned with the Company’s goal of seeking out long-term strategic partnerships and strengthening its capital structure, with a focus on creating value for its shareholders,” Gol’s said.

Source: The Wall Street Journal

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