12:06 PM EDT, 04/18/2024 (MT Newswires) -- (Updates with Gol's response in the fourth paragraph and Azul ( AZUL ) stock move in the fifth paragraph.)

Azul ( AZUL ) is in talks with Abra Group, the controlling shareholder of rival Brazilian airline Gol, for a potential stock-based merger deal, Bloomberg News reported Thursday, quoting unnamed sources familiar with the matter.

A scenario being discussed is Abra contributing its Gol shares to Azul ( AZUL ) in return for a stake in the combined company, the report said, adding that type of deal may be appealing to Azul ( AZUL ) as it wouldn't require much cash, if any at all.

Under that scenario, Abra would keep ownership of its stake in Avianca, another Latin American airline, Bloomberg reported.

Gol declined to comment to MT Newswires. Azul ( AZUL ) didn't immediately reply to a request for comment by MT Newswires.

Azul ( AZUL ) shares were falling more than 3% in recent trading.

(Market Chatter news is derived from conversations with market professionals globally. This information is believed to be from reliable sources but may include rumor and speculation. Accuracy is not guaranteed.)