DAL Delta Air Lines Inc

Delta Air Lines Inc. said it intends to acquire as much as an additional 32% stake in Grupo Aeromexico SAB at a 52% premium, in a deal that aims to strengthen the alliance between the carriers.

Delta intends to acquire the additional shares for 43.59 Mexican pesos ($2.60) each, while Grupo Aeromexico's stock recently traded at MXN28.74, according to FactSet.

The Atlanta company currently has a 4.1% stake in Grupo Aeromexico and holds an option to acquire an additional 8.1% of the carrier. The Delta pension trust holds options to acquire 4.6% of the company.

Following the transaction, Delta and Delta pension trust would own or have options to acquire as much as a 49% stake in Grupo Aeromexico.

Delta and other carriers pursue international partnerships because a web of bilateral air treaties limits their ability to fly on their own within foreign countries. The deals range from basic code-sharing pacts—where airlines list each other's flights on their reservation systems—to full-scale joint ventures that have antitrust immunity, so the partners can jointly set prices and schedules and share revenue.

Delta has the largest international network among U.S. carriers measured by traffic.

In March of 2015, Delta and Grupo Aeromexico filed for antitrust immunity in an effort to compete on routes between the U.S. and Mexico via a planned $1.5 billion joint venture.

Approval by both countries would allow the carriers to align their networks and scheduling while sharing costs and revenue on flights between the U.S. and Mexico.

Delta and Aeromexico launched their first code-share arrangement more than 20 years ago and entered an enhanced commercial agreement in 2011.

In 2012, Delta invested $65 million in Grupo Aeromexico, the parent company of Aeromexico. The two together offer about 4,000 weekly code-share flights.

Write to Tess Stynes at tess.stynes@wsj.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

(END) Dow Jones Newswires

November 18, 2015 18:35 ET (23:35 GMT)

Delta Air Lines (NYSE:DAL)
Historical Stock Chart
From Mar 2024 to Apr 2024

Delta Air Lines (NYSE:DAL)
Historical Stock Chart
From Apr 2023 to Apr 2024