LAN says signs non-binding deal with TAM to merge

SANTIAGO Fri Aug 13, 2010 4:10pm EDT

SANTIAGO Aug 13 (Reuters) - Chile's flagship airline LAN LAN.SN said on Friday it has signed a non-binding agreement with Brazil's TAM TAMM4.SATAM.N to merge both companies.

Shares in LAN surged over 7.7 percent after an earlier report on the possible merger.

(Reporting by Brad Haynes; Editing by Gunna Dickson)