SAO PAULO, Jan 8 (Reuters) - Brazilian airline Azul ( AZUL )

is expected to sign in the next few weeks a

memorandum of understandings with rival carrier Gol's

parent Abra for a potential merger between Azul ( AZUL ) and Gol,

newspaper Valor Economico reported on Wednesday.

The memorandum would stress the intention to merge while

establishing details pertaining to governance, capital structure

and different options to structure the deal, according to the

report, which cited sources involved in the talks.

Gol did not immediately respond to a request for comment,

while Azul ( AZUL ) declined to comment.

Azul ( AZUL )

has been

in talks with Abra Group to "explore opportunities," amid

speculation about a potential tie-up with Gol. The two carriers

announced a

codeshare deal

last May.

A key variable for the potential merger is the

conclusion of Gol's Chapter 11 bankruptcy proceeding, Valor

added, noting this is expected in April.