Brazil's Gol airline, Colombia's Avianca join forces in Abra Group

© Reuters. FILE PHOTO: The logo of Brazilian airline Gol Linhas Aereas Inteligentes SA is seen on a tail of an airplane at Augusto Severo International Airport in Natal, Brazil November 23, 2018. Picture taken November 23, 2018. REUTERS/Paulo Whitaker

By Gabriel Araujo

SAO PAULO (Reuters) -Brazilian airline Gol Linhas Aereas Inteligentes SA and Colombia's Avianca said on Wednesday they had agreed to create a holding company called Abra Group, bringing the two brands under the control of a single company.

Abra Group will be jointly controlled by the principal shareholders of Avianca and the majority shareholder of Gol, they said, adding that both airlines would continue to operate independently and maintain their respective brands.

They said other financial investors had committed to invest up to $350 million in Abra Group upon the closing of the deal, which is expected in the second half of 2022.

Abra, which has called itself a "pan-Latin American network of airlines," will also own a non-controlling 100% economic interest in Viva's operations in Colombia and Peru and a minority interest in Chile's Sky Airline.

Roberto Kriete will serve as the group chairman, while Gol's founder Constantino de Oliveira Junior will be the chief executive. Avianca's CEO Adrian Neuhauser and Gol's Chief Financial Officer Richard Lark will serve as co-presidents.

"This agreement places Abra's airlines in a position to lead air travel within the region - serving a population of over 1 billion and GDP of nearly $3 trillion - providing significant opportunities for capacity and revenue growth," Oliveira said.

Abra would focus on achieving synergies to ensure lower costs and expand routes, the firms said, without providing details.

Gol said in a separate filing that the transaction involved its controlling shareholder, investment fund MOBI FIA, and certain shareholders of Avianca Holding including Kingsland International, Elliott International and South Lake One.

MOBI FIA will contribute its Gol shares to the newly formed company in exchange for common shares of Abra, Gol said, adding that the holding company was set to be a private limited company incorporated under the laws of England and Wales.