ATLANTA and SANTIAGO, Chile, Sept.
26, 2019 /PRNewswire/ -- Delta (NYSE: DAL) and LATAM
Airlines Group S.A. (NYSE: LTM; IPSA: LTM) ("LATAM") today
announced that they have entered into a strategic partnership that
for the first time combines the strengths of the leading airlines
in North and Latin America.
"This transformative partnership with LATAM will bring together
our leading global brands, enabling us to provide the very best
service and reliability for travelers to, from and throughout the
Americas," said Ed Bastian, Delta's
chief executive officer. "Our people, customers, owners and
communities will all benefit from this exciting platform for future
growth."
"This alliance with Delta strengthens our company and enhances
our leadership in Latin America by
providing the best connectivity through our highly complementary
route networks," said Enrique Cueto
Plaza, chief executive officer of LATAM. "We look forward to
working alongside one of the world's best airlines to enhance the
travel experience for our passengers."
The strategic partnership will unlock new growth opportunities,
building upon Delta's and LATAM's global footprint and joint
ventures worldwide, including Delta's existing partnership with
Aeroméxico. With their complementary networks, Delta, LATAM and
their partners will be able to offer access to a greatly expanded
array of worldwide destinations. Together, the partnership will
provide greater customer convenience, a more seamless travel
experience and better connect customers with the rest of the
world.
Additional details of the partnership include:
- Delta will invest $1.9 billion
for a 20 percent stake in LATAM through a public tender offer at
$16 per share, to be funded
principally 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 has agreed
to assume LATAM's commitment to purchase 10 additional A350
aircraft to be delivered beginning in 2020 through 2025, supporting
Delta's ongoing fleet transformation.
- Delta will be represented on LATAM's Board of Directors,
further strengthening the relationship.
- The tender offer and the strategic partnership are subject to
customary closing conditions and all required governmental and
regulatory approvals, including anti-trust immunity.
Delta expects that the transaction will be accretive to EPS over
the next two years. In addition, the transaction will not impact
the company's existing financial commitments to shareholders,
including free cash flow and shareholder returns. Delta also
expects to remain within targeted leverage ratios.
For LATAM, the transaction will improve free cash flow
generation, reduce forecasted debt by over $2 billion by 2025 and improve LATAM's capital
structure, enhancing its ability to execute its long-term
strategy.
Delta Conference Call
Delta will hold a live conference call and webcast to discuss
the agreement on Friday, September 27,
2019 at 8:30 a.m. ET. A live
webcast of this event will be available at ir.delta.com. An online
replay will be available at the same site shortly after the webcast
is complete.
LATAM Conference Call
LATAM will hold a live conference call and webcast to discuss
the agreement on Friday, September 27,
2019 at 10:00 a.m. ET. A live
webcast of this event will be available at
www.latamairlinesgroup.net/investor-overview. An online
replay will be available at the same site shortly after the webcast
is complete. A replay of this call will be available until 12:00
(ET) on October 4, 2019.
Additional Information
The tender offer described in the exhibit to this Form 8-K has
not yet commenced, and this communication is neither an offer to
purchase nor a solicitation of an offer to sell any of the common
shares (the "Shares") of LATAM Airlines Group S.A. ("LATAM") and
American Depository Receipts representing the Shares or any other
securities. If required by applicable law and solely upon the
satisfaction of the conditions precedent to the tender offer
outlined herein, Delta intends to file with the U.S. Securities and
Exchange Commission a Tender Offer Statement and related materials
on Schedule TO, and to the extent required, LATAM would file a
Solicitation Recommendation on Schedule 14D-9. Holders of the
Shares and American Depository Receipts representing the Shares are
encouraged to read carefully such documents if and when they become
available, and as they may be amended from time to time, before any
decision is made with respect to the potential offer, because they
will contain important information. If and when filed, such
documents will be available free of charge at the website of the
U.S. Securities and Exchange Commission – www.sec.gov. In addition,
if and when filed, Delta will provide copies of such documents free
of charge to holders of the Shares and American Depository Receipts
representing the Shares.
About Delta
Delta Air Lines (NYSE: DAL) is the U.S. global airline leader in
products, services, innovation, reliability and customer
experience. Powered by its 80,000 people around the world, Delta
continues to invest billions in its people, delivering a
world-class travel experience and generating industry-leading
shareholder returns. With its constant drive to invest, innovate
and expand, Delta today is the world's No. 1 airline by total
revenues.
Delta serves nearly 200 million people every year, taking
customers across its industry-leading global network to more than
300 destinations in over 50 countries.
- Headquartered in Atlanta,
Delta offers more than 5,000 daily departures and as many as 15,000
affiliated departures including the premier SkyTeam alliance, of
which Delta is a founding member.
- Through its innovative alliances with Aeroméxico, Air
France-KLM, Alitalia, China Eastern,
Korean Air, Virgin Atlantic, Virgin Australia and WestJet, Delta is
bringing more choice and competition to customers worldwide.
- Delta operates significant hubs and key markets at airports in
Amsterdam, Atlanta, Boston, Detroit, London-Heathrow, Los
Angeles, Mexico City,
Minneapolis/St. Paul, New York-JFK
and LaGuardia, Paris- Charles de Gaulle, Salt Lake City, São Paulo, Seattle, Seoul-Incheon and Tokyo.
- Delta has been recognized as a Fortune's top 50 Most Admired
Companies in addition to being named the most admired airline for
the eighth time in nine years. Additionally, Delta has ranked No.1
in the Business Travel News Annual Airline survey for an
unprecedented eight consecutive years and named one of Fast
Company's Most Innovative Companies Worldwide for two consecutive
years.
- As an employer, Delta has been regularly awarded top honors
from organizations like Glassdoor and recognized as a top workplace
for women and members of the military. Delta CEO Ed Bastian was named among the "World's Greatest
Leaders" by Fortune magazine in 2018.
- Delta believes that its social responsibility lies at the
intersection of its core values and core competencies, making a
difference where Delta people live, work and fly by giving time,
talents and one percent of the company's annual profits.
- Diversity and Inclusion is core to Delta's culture and Delta
believes it should be reflected in its people, the companies with
which it does business, the way it treats customers and the manner
in which it serves the world.
- More about Delta can be found on the Delta News Hub as well as
delta.com, via @DeltaNewsHub on Twitter and
Facebook.com/delta.
About LATAM Airlines Group S.A
LATAM Airlines Group is Latin
America's leading airline group with one of the largest
route networks in the world, offering services to 143 destinations
in 25 countries, including six domestic markets in Latin America – Argentina, Brazil, Chile, Colombia, Ecuador and Peru – in addition to international operations
in Latin America, Europe, the United
States, the Caribbean,
Oceania, Africa and Asia.
The airline group employs over 41,000 people worldwide,
operating approximately 1,300 flights per day and transporting 71
million passengers per year.
LATAM Airlines Group has 322 aircraft in its fleet, which
features the latest and most modern models including the Boeing
787, Airbus A350, A321 and A320neo.
LATAM Airlines Group is the only airline group in the Americas
and one of three worldwide to be part of the Dow Jones
Sustainability 'World' Index. In 2019, it was recognized by the
index for sustainable practices, based on economic, social and
environmental criteria, for the sixth consecutive year.
LATAM Airlines Group shares are traded on the Santiago Stock
Exchange and the New York Stock Exchange in the form of ADRs.
For any commercial or brand related query, visit www.latam.com.
Further financial information is available via
http://www.latamairlinesgroup.net.
Delta Forward Looking Statements
Statements in this press release with respect to Delta that are
not historical facts, including statements regarding estimates,
expectations, beliefs, intentions, projections or strategies for
the future, may be "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. All
forward-looking statements involve a number of risks and
uncertainties that could cause actual results to differ materially
from the estimates, expectations, beliefs, intentions, projections
and strategies reflected in or suggested by the forward-looking
statements. These risks and uncertainties include, but are
not limited to, the cost of aircraft fuel; the availability of
aircraft fuel; the impact of fuel hedging activity including
rebalancing Delta's hedge portfolio, recording mark-to-market
adjustments or posting collateral in connection with fuel hedge
contracts; the performance of significant investments in airlines
in other parts of the world; the possible effects of accidents
involving Delta's aircraft; breaches or security lapses in Delta's
information technology systems; disruptions in Delta's information
technology infrastructure; dependence on technology in operations;
the restrictions that financial covenants in financing agreements
could have on financial and business operations; labor issues; the
effects of weather, natural disasters and seasonality on business;
the effects of an extended disruption in services provided by third
parties; failure or inability of insurance to cover a significant
liability at Monroe's Trainer
refinery; the impact of environmental regulation on the Trainer
refinery, including costs related to renewable fuel standard
regulations; ability to retain senior management and key employees;
damage to reputation and brand if Delta is exposed to significant
adverse publicity through social media; the effects of terrorist
attacks or geopolitical conflict; competitive conditions in the
airline industry; interruptions or disruptions in service at major
airports at which Delta operates; the effects of extensive
government regulation on business; the sensitivity of the airline
industry to prolonged periods of stagnant or weak economic
conditions; uncertainty in economic conditions and regulatory
environment in the United Kingdom
related to the exit of the United
Kingdom from the European Union; and the effects of the
rapid spread of contagious illnesses.
Additional information concerning risks and uncertainties that
could cause differences between Delta's actual results and
forward-looking statements is contained in Delta's Securities and
Exchange Commission filings, including Delta's Annual Report on
Form 10-K for the fiscal year ended Dec.
31, 2018. Caution should be taken not to place undue
reliance on Delta's forward-looking statements, which represent its
views only as of September 26, 2019,
and which Delta has no current intention to update.
LATAM Forward Looking Statements
This press release contains forward-looking statements. Such
statements may include words such as "may" "will," "expect,"
"intend," "anticipate," "estimate," "project," "believe" or other
similar expressions. Forward-looking statements are statements that
are not historical facts, including statements about our beliefs
and expectations. These statements are based on LATAM's current
plans, estimates and projections and, therefore, you should not
place undue reliance on them. Forward-looking statements involve
inherent known and unknown risks, uncertainties and other factors,
many of which are outside of LATAM's control and difficult to
predict. We caution you that a number of important factors could
cause actual results to differ materially from those contained in
any forward-looking statement. These factors and uncertainties
include in particular risks associated with uncertainties as to the
timing of the implementation of the strategic partnership; the
possibility that various conditions to the consummation of the
strategic partnership may not be satisfied or waived, including
that a governmental entity may prohibit, delay or refuse to grant a
necessary regulatory approval; the effects of disruption from the
strategic partnership on the respective businesses of Delta and
LATAM and those additional risks described in the documents we have
filed with the U.S. Securities and Exchange Commission.
Forward-looking statements speak only as of the date they are made,
and we undertake no obligation to update publicly any of them,
whether in light of new information, future events or
otherwise.
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SOURCE Delta Air Lines