Suspense Follows: Court Defers Judgement On Fusion Lan - Tam

PAL had presented to the Constitutional Court an appeal against an agreement between LAN and the National Economic Prosecutor to mitigate the effects that could lead to a union between the two regional giants. A favorable ruling would open the door for the creation of one of the ten largest airline groups in the world while adverse results take at least a couple of months the resolution of the case. "Not defined at all. Everything ran for the next week, depending on the allegations," said a source close to the process. Specialists believe that the postponement will have a negative effect because there is still uncertainty. LAN titles that had advanced 4% to reduced morning to the news up to 1.06% while the TAM at St. Paul's nearly 5% were at the afternoon at 1.79% .

For its part, Brazil approves and encourages the merger. While in Chile approval for the merger is still in court, the Brazilian government, through antitrust unit of the Ministry of Justice, recommended that it be approved without conditions the merger plan for the Brazilian airline TAM and LAN Chile , saying that not harm competition. The decision of the Brazilian anti-trust tribunal is the second of three antitrust agencies that must approve the union, announced a year ago when both companies signed a nonbinding memorandum of understanding, which last week formally ratified the Brazilian stock market , Chile and New York. After this step alone is that the Administrative Council for Economic Defense (CADE) issues its opinion. In ruling in favor, begin operating a new company called Latam Airlines Group that includes LAN Airlines and TAM Airlines and its subsidiaries. The expectation is that the union is complete before the first quarter of 2012, although there is still the opinion of the antitrust authorities of Chile. An additional problem is the constitutional motion filed by PAL Airlines on an agreement reached by LAN and the National Economic Prosecutor (FNE) to mitigate the effects of the announced merger.

The Constitutional Court (TC) welcomed the requirement for PAL against the merger, but rejected, for now, a request to suspend an ongoing investigation of the antitrust agency.

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