According to the Wall Street Journal, Brazil's largest airline by revenue TAM will pay as much as $250 million to acquire a maximum 31 per cent stake in a small Brazilian airline, TRIP Linhas Areas. The Wall Street Journal quoted a report filed by Brazilian financial newspaper, Valor Economico.

Valor Economico, citing unnamed persons close to the talks, said TAM will pay for the stake in two installments. The Journal said Company officials weren't immediately available for comment. Last week, TAM said it signed a letter of intent to buy a maximum 31% stake in TRIP. TRIP, with annual revenue of 750 million Brazilian reais ($454 million), ended 2010 with a market share of 2.71%, compared with TAM's 43.2%.

TAM is merging operations with Chile's flagship carrier, LAN Airlines SA. Earlier this month, the Chilean antitrust court said it will review the proposed merger.

However, shares in LAN Airlines and TAM fell on 21 March 2011, as the Chilean antitrust regulator announced it will proceed with a review of their planned merger. A probe would take six to nine months. LAN reportedly stated the investigation could delay the deal, stating even if it were approved by the end of 2Q2011, the companies would not be able to merge before 4Q2011. Shares in TAM were 4% lower, while LAN Airlines shares declined by 0.5% at the time.

The deal would create the world’s 11th largest carrier by passengers and would be the biggest corporate acquisition of an airline in at least two decades, according to data compiled by Bloomberg.

TAM Airlines is Brazil's and Latin America largest airline. It is headquartered in the city of São Paulo, and operates scheduled services to destinations within Brazil, as well as international flights to Europe and other parts of North and South America. Shares in the company are traded on the São Paulo Exchange and New York Stock Exchange.

According to the National Civil Aviation Agency of Brazil (ANAC), in February 2011, TAM had 39.59 per cent of the domestic and 85.85 per cent of the international market shares in terms of passengers per kilometer flown. Starting September 2010, statistics refer to the totality of TAM Group, comprising TAM Airlines and Pantanal Linhas Aéreas.

On August 13, 2010, TAM signed a non-binding agreement with Chilean airline LAN Airlines to merge and create LATAM Airlines Group.

7th March 2011