Regulatory status in Chile of business combination between LAN and TAM
Santiago, Chile, February 1, 2011
LAN Airlines S.A. (LAN) (NYSE: LFL/IPSA: LAN) informs that on January 27th, 2011, it signed with the Fiscalía Nacional Económica (FNE) an out-of-court agreement in connection with the investigation that has been conducted by the FNE for several months regarding the potential competitive impacts of the business combination between LAN and TAM S.A. (TAM). On the same date, this agreement was submitted to the Tribunal de Defensa de la Libre Competencia (TDLC), Chile’s antitrust court. The Chilean antitrust laws authorize the FNE to execute this type of agreement, which can only become effective if it is subsequently approved by the TDLC pursuant to an abbreviated procedure.
On January 28th, 2011, in response to a petition filed by a Chilean Consumer Association – Conadecus, the Tribunal de Defensa de la Libre Competencia (TDLC) decided not to review the agreement reached by the FNE and LAN and decided instead to submit the business combination between LAN and TAM to the general voluntary procedure for TDLC approval provided in the Chilean antitrust laws (which could materially delay the business combination). LAN and TAM cannot complete the business combination until this procedure is completed and TLDC renders a final decision approving the transaction. Therefore, the TDLC has decided – on an unprecedented basis - to review the business combination under the general voluntary procedure at the request of a third party that is not a party to the transaction or the FNE.
LAN is evaluating its options in light of this unprecedented decision issued by the TDLC.
LAN Airlines is one of the leading passenger and cargo airlines in Latin America. The company and its affiliates serve over 70 destinations around the world through an extensive network that offers full connectivity within Latin America, while also linking the region with North America, Europe and the South Pacific, as well as 70 additional international destinations through its various alliances. LAN Airlines and its affiliates have a leading position in their respective domestic markets of Chile and Peru as well as an important presence in the Argentinean and Ecuadorian domestic markets. Furthermore, in November 2010, LAN acquired Colombian airline AIRES.
Currently, LAN Airlines and its affiliates operate one of the most modern fleets in the world, with 118 passenger aircraft, and its cargo subsidiary, LAN CARGO and its respective cargo affiliates, have a fleet of 13 dedicated freighters. The Company has one of the youngest fleets in the world, which has meant greater efficiency and a significant reduction in CO2 emissions, reflecting its strong commitment to environmental protection.
LAN is one of the few Investment Grade airlines in the world (BBB). The company’s world class quality standards enabled its membership in oneworld™, the global alliance which LAN has been a member of for over 10 years that encompasses the best airlines in the world. For more information please visit www.lan.com or www.oneworldalliance.com