Delta looks to increase Aeromexico holding
20 / 11 / 2015
Delta Air Lines has announced plans to ramp up its shareholding in Aeromexico as it deepen its commitment to the South American country.
The US airline currently owns 4.1% of shares in Grupo Aeromexico but has submitted an offer to buy an additional 32% of the outstanding capital stock at MXP43.59 per share.
This will increase its ownership in the group to just over 36%, but Delta and the Delta pension trust would have option to purchase a further 12.7% of share between them.
Shares in Aeromexico opened the day trading at MXP28.47 meaning the offer represents a premium of more than 50%.
Delta president Ed Bastian said: “This new investment demonstrates Delta’s confidence in Mexico’s future and deepens our relationship with Aeromexico, cementing Delta’s long-term commitment to the customers we serve to, from and through Latin America."
While much of South and Central America continues to report economic woes, Mexico is stable.
This year, the International Monetary Fund is predicting GDP growth of 2.3% and next year GDP is expected to increase by a further 2.6%.
Delta intends to commence the tender offer once required regulatory approvals in Mexico and the United States have been obtained.
The transaction also is subject to approval by the Boards of Directors of Delta and Grupo Aeromexico.
The two airlines have been partners since 1994 when they first launched a codeshare.
In 2011, Delta entered into an enhanced commercial agreement with Aeromexico, and in 2012, Delta invested $65 million in shares of Grupo Aeromexico, the parent company of Aeromexico.
In March, Delta and Aeromexico filed an application with the U.S. Department of Transportation seeking antitrust immunity for a new joint venture on flights between the United States and Mexico.
Aeromexico’s cargo arm offers both domestic and international services, including courier and pharma operations.
According to IATA, Delta was the world’s 23rd most busy cargo airline in 2014.