Bloomberg News

Lan-Tam Merger Approved by Brazil Antitrust Agency Attorney

December 06, 2011

(Updates with shares in third paragraph and analyst comment in fourth.)

Dec. 5 (Bloomberg) -- Lan Airline SA’s $3.3 billion acquisition of Tam SA, Brazil’s largest airline by market value, received a second recommendation of approval by Brazilian authorities. Shares advanced.

Gilvandro Araujo, general attorney at Brazil’s antitrust regulator, or Cade, recommended that the transaction proceed without restrictions, according to a report distributed in Brasilia.

Tam advanced as much as 1.8 percent on Araujo’s recommendation after earlier falling 0.2 percent. Shares rose 0.4 percent to 35.01 reais at the close in Sao Paulo.

“That’s positive news, as any step forward on this process helps to reduce the uncertainty that still surrounds this deal,” Rosangela Ribeiro, an analyst at SLW Corretora brokerage, said in a telephone interview from Sao Paulo. “Investors will remain cautious until a final decision about this deal is reached.”

In August, the Brazilian Finance Ministry body in charge of analyzing mergers and acquisitions recommended the deal be approved without restrictions. The deal still needs to be voted on by Cade’s board. The antitrust regulator may start voting on the deal as soon as Dec. 14, Araujo said in an interview from Brasilia.

Santiago-based Lan, Latin America’s largest airline by market value, agreed to buy Tam in an all-stock transaction on Aug. 13, 2010. The combination follows similar tie-ups among U.S. and European carriers trying to reduce operating costs and increase revenue by offering a broader global market to passengers.

--With assistance from Ney Hayashi in Sao Paulo. Editors: Helder Marinho, Jonathan Roeder

To contact the reporter on this story: Arnaldo Galvão in Brasília at

To contact the editor responsible for this story: Helder Marinho at

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