#Brazil #São Paulo #GOL Linhas #corporate merger #Gol Investment

Introduction

In a pivotal move for the Brazilian aviation sector, GOL Linhas Aéreas Inteligentes S.A. (B3: GOLL54), one of Brazil's leading airlines, announced the initiation of a merger with Gol Investment Brasil S.A. (GIB). This strategic decision, approved by the Company's Board of Directors, is the result of a thorough review of corporate overhead and an effort to optimize operational efficiencies in compliance with regulatory standards.

Background of the Merger

On October 13, 2025, GOL made a public announcement declaring its intent to consolidate its operations with GIB into Gol Linhas Aéreas S.A. (GLA). The merger aims to streamline operations while simultaneously reducing costs. After the merger, both GOL and GIB will be dissolved, and their assets and liabilities transferred to GLA. This action is also aligned with GOL's objective to withdraw from the Level 2 Corporate Governance listing on B3—a move that reflects a significant shift in its corporate strategy aimed at improving efficiency and governance.

Key Details of the Merger

The structure of the merger includes the absorption of both GOL and GIB by GLA. Shareholders of both companies will receive GLA common shares based on a predetermined exchange ratio. Specifically, one common share of GOL will equate to one share of GLA, while preferred shares from GOL will convert at a rate of thirty-five shares of GLA for each preferred share held. An independent committee of directors has been set up to oversee these arrangements, ensuring fairness and transparency in the merger process.

Another aspect of this transition involves outstanding warrants held by GOL shareholders. These will be converted on a one-for-one basis into GLA warrants, which will also confer the right to thirty-five shares of GLA. This part of the strategy reinforces GOL's intention of maintaining shareholder value while executing its corporate plan.

Implications of the Merger

One significant consequence of this merger is GOL's aim to address its free float percentage—a crucial aspect for maintaining compliance with Level 2 regulations. With GIB currently holding approximately 99.97% of GOL's common shares, the company faces a steep decline in its float if this merger proceeds without strategic adjustments. This merger presents an opportunity to align GOL's operations under a single administration, thus enhancing governance and reducing structural complexity.

Moreover, through this merger, GOL aims to recover from past corporate challenges and strengthen its financial standing. The newly formed entity post-merger will work towards ensuring that all necessary regulatory permissions are fulfilled and minor shareholders are treated fairly in the transitional process.

Concerns and Risks

Despite the optimistic outlook, there remain several risks tied to the merger's success. There is a substantial reliance on shareholder approval during upcoming general meetings. Delays or failures to meet the conditions for consummation could hinder the implementation of GOL's corporate strategy. Additionally, as GLA will not maintain public company status post-merger, existing shareholders may encounter diminished liquidity and governance rights, which may affect their long-term investment outlook.

Next Steps

GOL has already scheduled Extraordinary General Meetings to deliberate upon this merger on November 4, 2025. During these meetings, shareholders will have the chance to engage in discussions regarding the merger proposal and the appointment of a tender offer appraiser, essential to facilitate the exit from Level 2 governance. This transition period aims to keep stakeholders informed at every stage, ensuring regulatory compliance and transparency.

Conclusion

GOL Linhas Aéreas' intent to merge with Gol Investment Brasil signifies a bold step in reestablishing its position within the competitive landscape of Brazil's aviation industry. By consolidating operations and recalibrating its corporate structure, GOL aims to set a new trajectory focused on enhanced efficiency and streamlined governance, ultimately benefiting shareholders and passengers alike.