Delta Takes Gol Stake

Delta Airlines has agreed to acquire a minority stake in Brazil’s Gol Linhas Aereas Inteligentes for $100m, in a deal that may cause some Gol shareholder dilution. The US carrier is expected to pay $100m for preferred shares in the hands of controlling shareholders at a rate of BRL22.00 ($12.25) per ADS, Gol says. The stake is estimated to be about 2.9%, Citi says in a report. As part of the deal, the controlling shareholders will issue new ADS in a capital increase of BRL280m, and Delta will receive a seat on the board of the low cost Brazilian carrier. The deal came at a 53% premium over Gol’s Tuesday close, noted a person close to the transaction. Morgan Stanley and law firm Milbank, Tweed, Hadley & McCoy advised Gol. Executives at Gol told analysts in a conference call that the transaction will lead to synergies but they would not yet quantify these. Some observers expressed reservations about what the deal would mean for Gol’s minority shareholders. “We are concerned that the controlling shareholders are selling a position in the company at a bid premium versus Tuesday’s close…Preferred shareholders will get a much better deal, versus the dilution faced by minority shareholders, once the capital increase occurs,” Citi says. Gol shares closed Wednesday at BRL15.59.