In a deal pegged at $3.7 billion, Chilean airline company, Lan Airlines SA, said it had completed an agreement that will see it takeover the Brazilian airlines firm, Tam SA. Lan Airlines SA is Latin America’s largest carrier in terms of market value and the Brazilian investment is expected to enable the firm further expand its foothold in the region. The Brazilian airlines market has been impressive recently, as rising incomes increase demand for leisure travel.

The Chilean company reiterated that it was keen on accessing the burgeoning market in Latin America’s biggest economy, Brazil. Based in Santiago, Chile, Lan’s shareholders will control 70% of the merged entity whereas Tam’s investors will control the remaining stake under the terms of a non binding agreement, said Alejandro de la Fuente, Lan’s chief financial officer.

However, the deal is not the only one of its kind witnessed recently. Other tie ups have been undertaken between American and European carriers keen on reducing costs and driving up revenues through the provision of a wider range of global market to passengers. The move is majorly aimed at fighting off the effects of the global financial meltdown that hit the Airlines Industry hard.

According to Libano Barroso, chief executive officer of Tam Linhas Aereas, in the future the world may have not more than 10 major airlines. Lan’s Tam acquisition effectively gives it access to an airline firm with huge revenues and a firm grip on the Brazilian airlines market. In 2009,