By Jeffrey T. Lewis


SAO PAULO--Gol Linhas Aereas Inteligentes SA's shares climbed Wednesday after the Brazilian airline announced an agreement to merge with Colombia's Avianca Holdings SA.

The Rio de Janeiro-based Gol's shares rose 3.7% to 13.64 reais, the equivalent of $2.67, in late-morning trading while Brazil's benchmark Ibovespa stocks index was up 2.1% at the same time. Gol's shares were down 23% year-to-date through Tuesday's close.

The controlling shareholders of Gol and of Bogota-based Avianca plan to place their shares in a holding company that will control both airlines, though the two companies will maintain separate operations and brands, Gol said Wednesday morning.

Avianca filed for bankruptcy protection in the U.S. in May, 2020 as travel restriction imposed at the start of the coronavirus pandemic slashed demand for flights, and a court approved the airline's restructuring plan in November 2021.

Two other major Latin American airlines, Grupo Aeromexico SAB de CV and Chile's Latam Airlines Group SA, also filed for bankruptcy protection in 2020 because of the pandemic.


Write to Jeffrey T. Lewis at jeffrey.lewis@wsj.com


(END) Dow Jones Newswires

05-11-22 1054ET