Avianca and TACA will form the leading Airline Network in Latin America to
strengthen strategic position and capacity for growth
Becoming the airline group with the largest coverage, serving more than 100 destinations in America
A unique passenger and cargo network in Latin America through the strategic hubs in Bogotá, San Salvador, San José de Costa Rica and Lima
The combined strengths of their complementary fleet, aligned service strategies coupled with the outstanding talent of their people will enable the airline group to build a more competitive business model
Avianca and TACA will preserve their respective brands and continue to operate separately under a
common strategic vision
BOGOTA, Colombia, SAN SALVADOR, El Salvador, LIMA, Peru and SAN JOSE, Costa Rica - October 7, 2009 - Synergy Group and Grupo Taca Holdings Ltd announced today that they have reached an agreement leading to the creation of Latin America's leading airline group. As a result of this agreement, each shareholder will contribute its respective controlling ownership participations in the operations of Aerovías Del Continente Americano S.A., ("Avianca"), Colombia's leading airline, and Grupo TACA ("TACA"), Central America's leading carrier, to a newly formed holding company. The transaction is subject to regulatory and other antitrust approvals.
The new group will capitalize on two of the best known airline brands in Latin America, two world-class product offerings, strong hubs and complementary networks, as well as two uniquely entrepreneurial and service-oriented cultures with highly motivated employees. By leveraging the new group's four hubs-in Bogota, Lima, San Salvador and San Jose, Costa Rica -Avianca and TACA will be able to offer customers better service to more destinations than any other carrier in the region. Employees will also benefit from the new group's greater geographical diversification and stronger combined platform for future growth and career development in the face of a still challenging economic environment, volatile fuel prices and intense competition.
Roberto Kriete, Chairman and CEO of TACA, who will serve as Chairman of the future group, said, "Grupo TACA has long been a leading force for consolidation and rationalization in the Latin American airline industry. This latest chapter is a significant milestone in our corporate evolution, giving us the breadth and scale to better compete with any player in our markets while ensuring our long-term success. It represents a unique opportunity for all of our employees and shareholders to form part of one of the leading airline groups in the Americas."
Germán Efromovich, Chairman of the Synergy Group, said, "We are proud of what Avianca has achieved over the past few years in terms of the strong corporate culture we have developed and the quality of service we are providing. With this formidable partnership we will be able to build further on that success and provide our passengers access to what is now Latin America's leading airline network, as well as creating opportunities for further growth and development for all our employees."
Fabio Villegas, CEO of Avianca, who will serve as CEO of the future group once the transaction closes, said "This is a great day in the history of aviation. We are bringing together two of the world's oldest airlines -two institutions with a unique focus on servicing their customers and on the well-being of all their stakeholders- to create an industry leader. I look forward to working with all of our employees as we execute on a vision to build not only the biggest, but the best, airline in the region."
One Group, Two Airlines
Avianca and TACA have nearly USD 3 billion in aggregate annual revenues, serve more than 100 destinations worldwide (including 75 cities in Latin America, the largest number of any carrier), operate a fleet of 129 aircraft, employ approximately 12,000 people, and have over 3 million frequent-flyer program members.
Upon closing of the transaction, the new group's senior management team will combine the leadership of both companies: Avianca CEO Fabio Villegas will become chief executive officer of the new group. TACA COO Estuardo Ortiz will become the chief operating officer and Avianca CFO Gerardo Grajales will become the chief financial officer.
The two airlines will continue to operate as separate companies, maintaining the same reporting lines within each organization, thereby building on the strengths of their respective brands, hubs and networks, while coordinating operations to provide seamless services to their passengers throughout the combined network.
The shares of both Avianca and TACA's controlling entities will be contributed to a new holding company in a business combination worth in excess of US dollar 3 billion. Each operating company will remain independent while the new group will leverage best business practices across both organizations.
Following the transaction, both sets of shareholders will share in the governance of the newly created group. TACA CEO and Chairman of the Board Roberto Kriete will become chairman of the new group's Board of Directors.
The transaction is subject to regulatory and other customary approvals.
Bank of America Merrill Lynch and Caoba Capital acted as financial advisors to TACA and Greenberg Traurig acted as counsel. Simpson Thacher & Bartlett and Gómez-Pinzón Zuleta acted as counsel to Avianca.