Published On: Fri, Feb 21st, 2014

Air France-KLM will invest 100 million dollars in Brazilian airline Gol

golWILLEMSTAD - Brazilian airline Gol Linhas Aereas formed a partnership with Air France- KLM, a deal which includes flights and joint sales, where the European company will invest 100 million dollars in its South American pair.

As part of the agreement, Air France- KLM will buy 52 million dollars in preferred shares at 12.23 dollars each. The remaining 48 million will come in the form of commercial agreements and bonuses based on the achievement of potential cost savings.

One of the main reasons for the Air France -KLM investment is their desire to get advantage of the potential increase in travel demand during the World Cup in Brazil this year and the Olympics in Rio de Janeiro in 2016.

Air France- KLM will pay Gol a premium of about 169 per cent on its share price, according to Wednesday's closing price of 4.55 dollars.

One of Gol’s preferred shares negotiated in Brazil equals a listed share in the United States. Gol’s shares closed at 10.93 reais in Sao Paulo Stock Exchange on Wednesday.

Both companies expect to obtain regulatory approval of the deal in the next three months, in time for the start of the World Cup in June.

The transaction, which involves an exclusive agreement for Gol and Air France- KLM in the European and Brazilian markets, will allow both companies to increase their reach to 318 destinations and more than 115 countries.

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