SAO PAULO (Reuters) – Brazilian airline Azul is expected to sign a memorandum of understanding in the next few weeks with Abra, the parent of rival carrier Gol, on a potential merger between Azul and Gol, newspaper Valor Economico reported on Wednesday.
The memorandum will highlight the intent of the merger and will also set out details regarding governance, capital structure and various options for structuring the deal, according to the report, which cites sources involved in the negotiations.
Gol did not immediately respond to a request for comment, and Azul declined to comment.
Azul was in talks with Abra Group to “explore opportunities” amid rumors of a potential collaboration with Gol. The two carriers announced a codeshare agreement in May last year.
A key variable for a potential merger is the completion of Gol’s Chapter 11 bankruptcy, Valor added, noting that is expected in April.