Brazil’s Azul signs preliminary deal to explore merger with Gol
Investing.com– Brazilian airline Azul SA (NYSE:AZUL) and Abra- the majority investor in its rival Gol, said they had signed a non-binding agreement on Wednesday to explore the combination of their businesses in Brazil.
Said combination has the potential to create Brazil’s biggest airline, outpacing the local unit of Chile’s LATAM Airlines (NYSE:LTM).
Azul and Abra said they had signed a non-binding Memorandum of Association over a potential merger.
Both Azul and Gol are expected to keep their operating certificates and retain their individual brands and operations, Azul and Abra said in a press release.
Wednesday’s MoU includes governance and capital structure agreements, and marks a step towards more discussions over the deal. But the two did not disclose any other terms of a potential deal.
The deal also represents a lifeline for Gol, which is in the middle of Chapter 11 bankruptcy proceedings. The company released a revised five-year strategic plan to exit bankruptcy on Wednesday.
Azul’s U.S.-listed shares rallied 4.6% in aftermarket trade, following the announcement of the MoU. They had surged 7.5% on Wednesday.
