Delta Air Lines to boost stake in Aeromexico to 49%

Delta Air Lines Inc is looking to enhance its presence in the world's emerging markets with chief executive officer Richard Anderson expanding the carrier's stake in Grupo Aeromexico SAB to as much as 49 per cent.

The offer of 43.59 pesos per share is 52 per cent more than yesterday's closing price, when Aeromexico was valued at 20.4 billion pesos ($1.22 billion). Delta intends to acquire 32 per cent additional stake in the firm, to double its current holdings in Mexico's largest airline.

Delta's move adds to the carrier's history of acquisitions outside the US, most recently an accord in July for 3.6 per cent of China Eastern Airlines Corp for $450 million. The US carrier, in September, more than tripled its stake in Brazil's Gol Linhas Aereas Inteligentes SA, and in 2012 agreed to acquire 49 per cent of Richard Branson's Virgin Atlantic Airways Ltd.

Anderson intends to have a foothold in all major regions for Delta, the world's third-biggest airline. He had publicly stated on several occasions his intention to build a hub in Shanghai.

''What you're hunting is a diversity of network, a diversity of traffic flows in the important places in the world," Anderson said in a Bloomberg News interview in March. ''You want a diversity of revenue from products and a diversity of revenues from regions and currencies, so that's what we've built, and some are going to be doing better than others over time, but the whole is going to be a very durable enterprise.''

The stake expansion will strengthen the airlines' partnership, provide more travel options for customers in the US and Mexico and deliver the industry's best customer experience.
Delta Air Lines and the Delta Connection carriers offerings extend across 370 destinations on six continents.

Currently, Delta owns approximately 4.1 per cent of the outstanding shares of Grupo Aeromexico and holds an option to acquire an additional 8.1 per cent. Separately, the Delta pension trust holds options to acquire approximately 4.6 per cent of Grupo Aeromexico.

Following completion of the tender offer, Delta and the Delta pension trust collectively would own and/or have options to acquire up to a total of 49 per cent of the outstanding shares of Grupo Aeromexico.

"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," said Delta president Ed Bastian.