Delta Air Lines Inc said Wednesday it intends to buy up to an additional 32 percent of Grupo Aeromexico, in what could be a nearly $600 million cash deal that strengthens its grip on a fast-growing market.
The investment could raise Delta’s 4.1-percent stake in Aeromexico to 49 percent, if Delta and its pension trust also exercise share purchase options they hold. Delta offered to pay some 52 percent above the Mexican airline’s closing price of 28.74 Mexican pesos.
The move reflects an attempt by Delta to raise competition with American Airlines Group Inc, which has been a larger player in travel to Latin America. It follows a recent application by Delta and Aeromexico for immunity from U.S. antitrust law so they can coordinate schedules and prices for flights, making connections more attractive for customers.
Aeromexico said in a news release that it was informed of Delta’s intentions. The deal remains subject to approval by both companies’ boards.
“This new investment demonstrates Delta’s confidence in Mexico’s future,” Delta’s President Ed Bastian, who sits on Aeromexico’s board, said in a news release.
Full content: Bloomberg
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