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Delta and LATAM Airlines they form the largest alliance in America, thus creating the largest and strongest association within the continent.
Delta y LATAM Airlines Group S.A. («LATAM») announced today that they have established a strategic partnership that for the first time combines the strengths of the leading airlines in North America and Latin America.
Strategic partnership will unlock new growth opportunities, leveraging Delta and LATAM's global footprint and joint ventures around the world, including Delta's existing partnership with Aeroméxico.
With its complementary networks, Delta, LATAM and its partners will be able to offer access to a wide variety of destinations around the world. Together, the partnership will provide greater customer convenience, a more seamless travel experience and will better connect customers with the rest of the world.
Additional details of the partnership include:
- Delta will invest $ 1.9 billion for a share of 20 percent in LATAM through a public offering to $ 16 per share, which will be financed primarily with newly issued debt and available cash.
- Delta will also invest $ 350 million to support the establishment of the strategic partnership.
- Delta will acquire four A350 aircraft from LATAM and agreed to assume LATAM's commitment to purchase 10 additional A350 aircraft to be delivered from 2020 until 2025, supporting Delta's ongoing fleet transformation.
- Delta will be represented on the LATAM Board of Directors, further strengthening the relationship.
- The public offering and strategic partnership are subject to customary closing conditions and all required governmental and regulatory approvals., including antitrust immunity.
Delta expects transaction to be EPS positive over the next two years. What's more, The transaction will not affect the company's existing financial commitments to shareholders, including free cash flow and shareholder returns. Delta also expects to remain within specified leverage ratios.
For LATAM, the transaction will improve free cash flow generation, will reduce the expected debt by more than $ 2 billion for 2025 and will improve LATAM's capital structure, improving your ability to execute your long-term strategy.
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Radical changes are coming in Latin American aviation. Excellent move by Delta. Now the interesting thing is to know what effect this new alliance will have for Ecuador.. In recent years we have seen very varied strategies in Latam Ecuador with no intention of expanding the international market. We hope that this alliance will open the doors to new markets to and from Ecuador..