UPDATE 2-Bristow buys stake in Brazil's Lider

* Bristow to get 20 pct voting rights in Lider

* Deal to be funded with cash on hand

* Deal expected to add to Bristow earnings

* Says deal to help expand relationship with Petrobras (Recasts; adds conference call comments, background, share movement)

May 27 (Reuters) - Bristow Group Inc (BRS.N), which provides helicopter services to the offshore energy industry, said it acquired a 42.5 percent stake in Brazil's Lider Aviacao Holding S.A for $174 million, helping it expand its helicopter operations in Brazil.

In an interview with Reuters in April, the company's Chief Executive William Chiles had said Bristow was looking to expand in Brazil. [ID:nWNAB1556]

"It would be extremely difficult for Bristow to go down there and compete heads-up with the five other operators there or the five existing operators," Chiles said Wednesday in a conference call with analysts.

"The way I look at it, it gives us a ticket to play in the Super Bowl and otherwise we would be locked out of that market," he added.

Bristow said the deal with Lider would help it expand its relationship with Brazil's state-run oil company Petrobras (PETR4.SA)(PBR.N).

Lider provides about 38 percent of the transportation needs of Petrobras, Bristow said.

Brazil has become a hotspot for companies exploring oil and gas. Big-ticket oil names like BP Plc (BP.L), Chevron Corp (CVX.N) and Royal Dutch Shell (RDSa.L) have been expanding their presence there.

Petrobras shocked the oil world in November 2007 when it said the ultra-deep, offshore Tupi field contained up to 8 billion barrels of recoverable light oil and gas, which would make it the second-biggest oil find in 20 years. [ID:nN01347761]

Earlier this month, Petrobras said it lifted the first subsalt oil from the field. Around 80 percent of Brazil's current domestic oil output of about 1.9 million barrels a day comes from the Campos Basin.

Bristow said Brazil would continue to fund and develop the Campos Basin and Tupi field, despite the economic slowdown and the fall in oil prices in recent months, as both are economically and politically critical for the country.

DEAL TERMS

Out of the $174 million paid to acquire the stake, $80 million went to the company itself and $94 million went to selling shareholders, acting finance chief Elizabeth Brumley said on the call.

Also, Lider purchased one large and four medium aircraft from Bristow valued at about $55 million, resulting in a net cash outlay of $119 million by Bristow, the company said.

Bristow said it would use capital raised in June 2008 for the issuance of equity and convertible notes to fund the Lider transaction and no additional capital was needed.

The company also said the stake purchase gives it the right to provide helicopters for 100 percent of Lider's helicopter lease requirements.

It would also have the right of first refusal for future secondary sale of Lider shares.

Bristow would appoint one person on Lider's five member board and appoint one senior manager in Lider.

Bristow's stake in Lider would give it about 20 percent of voting rights in Lider, the company said, adding the deal was expected to add to earnings.

Shares of Bristow were trading up 1.77 percent at $28.70 in afternoon trade on the New York Stock Excahnge. The stock has traded in a range of $16.42 to $52.58 in the last one year. (Reporting by Hezron Selvi and Sakthi Prasad in Bangalore; Editing by Ratul Ray Chaudhuri)