Delta Air Lines Inc. on Monday launched a cash tender offer through the Mexican stock exchange to acquire as much as an additional 32 percent stake in Mexico’s largest airline company, Grupo Aeroméxico SAB de CV.
Atlanta-based Delta, one of the largest carriers in the Minneapolis-St. Paul International Airport, currently owns 4.2 percent of the outstanding shares in Aeroméxico, and holds options to acquire an additional 12.8 percent stake.
If investors who own 25 percent or more of Aeroméxico approve the deal, Delta could control, or have the option to acquire, up to 49 percent of the Mexican airliner.
Delta’s intention to invest in Aeroméxico began in 2011 when it purchased the 4.2 percent stake for $65 million. A few years later, both companies entered into a joint cooperation agreement relating to flights between the U.S. and Mexico, which, as of last year, was approved by the U.S. Department of Transportation and was granted immunity from U.S. antitrust laws.
Aeroméxico’s CEO Andrés Conesa has called the partnership “the first and largest cross-border alliance between Mexico and the United States.”
In its latest offer, Delta said it would pay 53 Mexican pesos per share, a roughly 34 percent premium, according to Reuters
. Altogether, the deal is reportedly valued at $590 million.
“This is the next step in expanding our longstanding relationship with Aeroméxico, a partnership built on our shared commitment to our customers in the U.S. and Mexico,” Delta CEO Ed Bastian said in a statement.
Just last Thursday, Bastian was among the airline industry executives that met with President Donald Trump. Following the meeting, Bastian said they “had a positive discussion about many of the major issues facing U.S. travelers, airline employees and the aviation industry.”
The value of both Delta stock and Aeroméxico stock rose Monday upon news of the cash tender offer. Aeroméxico shares are up nearly 17 percent from Friday’s close, while Delta shares rose as much as 2 percent during the same period.