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(Recasts first paragraph, adds share price, background)
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 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 is due to talk to Italian carrier Meridiana later on Tuesday about the proposed purchase of a 49 percent stake.
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.
For LATAM Airlines itself, the cash injection was a welcome boost, analysts said. Shares hit their highest level in over a year, up 20 percent to 5,400 pesos in Santiago and $8.20 in the U.S..
Formed in a merger between onetime investor darling Chile's LAN and Brazil's TAM in 2012, the company has repeatedly disappointed the market, with full-year earnings losses reported in the last four years.
It has reduced fleet spending and cut capacity, particularly from Brazil, and has said its recovery is dependent on an improvement in that country's economy.
The agreement provides for Qatar Airways to acquire up to 10 percent of LATAM's total shares following a capital increase.
"This investment provides potential opportunities for Qatar Airways' global network, alongside our successful investment in IAG," Qatar Airways' chief executive, Akbar Al Baker, told a media briefing at the Farnborough Airshow in England.
In coming weeks, LATAM will hold an extraordinary shareholders meeting to propose a capital increase of $613 million through the issuance of new shares at $10 per share, the companies said in a statement. The airline's controlling shareholder families have agreed to the transaction.
The deal will also give Qatar the right to name a board member, subject to approval by the rest of the board.
"In addition to strengthening our financial position, (this deal) will allow us to explore new opportunities for connectivity with Asia and the Middle East," LATAM's chief executive, Enrique Cueto, said on Tuesday. (Reporting by Conor Humphries in Farnborough and Rosalba O'Brien in Santiago; Editing by Mark Potter)