Brazil’s Azul withdraws its bid for LATAM Airlines.

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Brazilian airline Azul confirmed Monday that it made a bid this month to buy LATAM Airlines, which is in bankruptcy law protection, but then had decided to focus on its own operations.

In a stock exchange statement released late Sunday, Azul said it would only consider possible partnerships in the future.

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The Brazilian airline said its non-binding proposal submitted on Nov. 11 had included around $5 billion in equity financing and was backed by some creditors of LATAM, Reuters reported.

However, Azul added that LATAM’s valuation in the bankruptcy proceedings had become higher than it found acceptable, citing ongoing uncertainty in the aviation industry amid the COVID-19 pandemic, especially in long-haul markets.

“As a result, Azul will continue to focus on its unique competitive advantages provided by its unique network and fleet flexibility (…) and will evaluate future partnerships and consolidation opportunities available in the market,” Azul said.

LATAM on Friday filed a reorganization plan proposing to raise $8.19 billion in capital in an attempt to exit its Chapter 11 bankruptcy.

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The Chilean company previously said it had received several offers to finance the exit from Chapter 11 bankruptcy, each for more than $5 billion.

Azul said in its filing late Sunday that it believed its non-binding proposal would have provided a significant increase in network growth and generated synergies estimated at more than $4 billion.

It added that “the stand-alone plan submitted by LATAM is, by definition, incapable of generating synergies from a combination.”

(Reporting by Gabriel Araujo; Editing by Jan Harvey)

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