Synergies to add $3 bln to new LAN-TAM group-report

* LAN CEO says merger key to compete in tough industry

* LAN’s Cueto family to control 24-25 pct of new group

SANTIAGO, Aug 14 (BestGrowthStock) – A merger between Brazil’s TAM
and Chile’s LAN airlines would generate synergies likely to add
some $3 billion in value to the new group, LAN’s chief
executive was quoted as saying by a local paper on Saturday.

Both companies announced on Friday a proposed merger via a
$2.7 billion all-stock transaction, which would create Latin
America’s top carrier and the No. 11 in the world in terms of
passengers carried. [ID:nN13221392]

LAN (LAN.SN: ) (LFL.N: ) CEO Enrique Cueto told Santiago-based
La Tercera daily the merger is crucial for his carrier to
compete in a more consolidated global airline industry, break
into the booming Brazilian market and generate important
savings.

If the merger is approved Cueto will be the CEO of the new
LATAM Airlines Group while TAM’s (TAMM4.SA: ) (TAM.N: ) deputy
chairman, Mauricio Rolim, will be the chairman.

“We believe that the $400 million in annual synergies has
an additional value of $3 billion that in time will be
reflected in our results,” Cueto said. “If you take the current
price, without synergies, its (combined airline) value is
around $11.5 billion.”

TAM’s Amaro family and LAN’s Cueto, both of which control
their respective airlines, will jointly own a 37-38 percent
stake in the combined carrier, said Cueto. His brother Ignacio,
LAN’s chief operating officer, said in that same interview that
the Cueto family will have a 24-25 percent stake.

The deal will allow both carriers to keep flying with their
own brands under the control of a holding company. The
structure seems designed to portray a merger of equals that
could help it clear potential legal and political hurdles in
both countries. Brazilian regulations forbid foreigners from
holding more than 20 percent of a domestic airline.

(Writing by Alonso Soto; Editing by Eric Beech)

Synergies to add $3 bln to new LAN-TAM group-report