Continental Airlines and United Airlines formalize their marriage
American Airlines Continental Airlines and United Airlines (UAL) announced Monday their merger for approximately $ 3 billion to form the world's largest airline at Delta Air Lines. This fusion is done by exchange of shares with no added bonus, according to the statement released by United Airlines. Under the terms of the agreement, shareholders will receive 1.05 share of Continental United Continental title for each, valuing Continental at about $ 3 billion during Friday.
Following the merger, shareholders of United will hold approximately 55% stake in the merged entity and those of Continental 45%.The two companies expect annual synergies of about 1 to 1.2 billion by 2013 and the new company should reach an annual turnover of 29 billion dollars.
The transaction, which must still be approved by competition authorities, should be finalized in the fourth quarter of 2010. The new airline will be called United and based in Chicago. The aircraft will fly under the colors and logos of the company Continental, with the name United. The group will be led by current CEO of Continental, Jeff Smisek. Glenn Tilton, CEO of UAL will present non-executive chairman.
World number one passenger
If the merger is approved, the new company will rank first among world as a carrier of passengers to Delta Airlines.
Together, the two groups serve 370 destinations in 59 countries.They carry on board their aircraft more than 144 million passengers per year. "The two companies are complementary," last week estimated Jared Harckham, an analyst at consulting firm SH & E specialist, told AFP. "United is well positioned in the Pacific, Chicago, Washington, Denver and in California, while Continental is well established in New York, South America and the Caribbean," he stressed. The two companies had already negotiated a reconciliation two years ago, which had failed.
Since the economic crisis has reinforced the concentration scenarios in the aviation sector. The last important approximation goes back to 2008: Delta Airlines and Northwest Airlines have merged to form the current world number one.
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