Brazilian airline Gol purchased Varig for approximately US$ 275 million. With the inclusion of Varig debentures on the stock market, the value of the acquisition may rise as high as US$ 320 million, according to a press statement by Gol.
The companies should operate independently. In the statement, Gol says that, with the acquisition, the company will manage to transport 20 million passengers a year, becoming capable of competing in South America and on the global market against other great international airlines.
Gol is also promising that it will become, at the end of 2007, the leader on the Brazilian market.
The transaction still needs to be approved by the National Civil Aviation Agency (ANAC) and by the Administrative Council for Economic Defense (Cade) to evaluate a possible impact for market competition and consumers.
The negotiations forecast the payment of US$ 98 million, the delivery of 6.1 million in preferred shares issued by Gol, representing approximately 3% of all company shares.
The company also accepts the obligation of honoring the Varig 100 million reais (approximately US$ 50 million) debenture issue. A debenture is a long-term debt instrument used by governments and large companies to obtain funds on the market.
Gol president Constantino de Oliveira Júnior stated that the acquisition "guarantees the maintenance of the Varig brand, and of this important company in international aviation, marking the presence of Brazil on the global market. We will, in the medium term, double the company's fleet."
"Apart from that, the operation will permit an increment in the offer of work posts in national aviation. To the clients, it means stronger national aviation, with more consistent and differentiated services," says the statement. The Varig president, Guilherme Laager, in turn, stated that the "Gol proposal was the best for the company's future".
The statement published by Gol clarifies that the operation is subject to the approval of regulators, including the Cade. For the acquisition to come true, both companies will have to provide information about the financial and operational aspects involved. While the deal is not approved by ANAC, company operation will continue as it is at present.
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