UPDATE 3-LATAM Airlines shares soar as Qatar takes stake
(Adds analyst comment, background, updates shares)
By Conor Humphries and Rosalba O'Brien
FARNBOROUGH/SANTIAGO July 12 (Reuters) - Qatar Airways has agreed to acquire up to 10 percent of LATAM Airlines, the two companies said on Tuesday, in a $613 million deal that sent shares in Latin America's largest airline soaring.
The deal, announced at the Farnborough air show in England, follows Qatar Airways' purchase last year of 15 percent of British Airways owner International Airlines Group, which, like Qatar and LATAM, is a member of the Oneworld airline alliance.
The move is part of a rapid global expansion by the Doha-based airline, which was due to talk to Italian carrier Meridiana later on Tuesday about the proposed purchase of a 49 percent stake.
Shares in LATAM hit their highest level in over a year, up as much as 25 percent before paring gains to trade up 14 percent by 11 a.m. ET (1600 GMT) at 5,180 pesos in Santiago and $7.90 in the United States..
Latin American airlines have struggled as a global commodities downturn has sapped growth and weakened currencies, but the region's growing middle class and untapped potential still make it an attractive target for foreign carriers.
U.S. airlines are circling Panama-based Avianca Holdings SA , while Brazilian government plans to loosen tough restrictions on foreign ownership of its airlines could lead to a rush of badly needed fresh capital.