MEXICO CITY, March 26 (Reuters) - Mexican budget airline

Volaris said on Thursday that shareholders approved

its merger with rival Viva Aerobus.

The all-stock transaction will see Volaris emerge as the

surviving entity while Viva Aerobus ceases to exist, according

to a filing with Mexico's stock exchange. Volaris will issue new

shares representing 50% of the combined company on a fully

diluted basis to Viva shareholders.

DEAL DETAILS

-- Reuters exclusively reported the merger in December before the

two carriers confirmed.

-- Volaris will increase capital by up to $248.3 million through

new share issuance.

-- The merger remains subject to regulatory approvals in Mexico,

the United States and Colombia.

-- The merger requires the companies to maintain pre-merger

business activities for at least one year to avoid tax

implications under Mexican law.