Washington approves United, Continental merger
WASHINGTON, Aug 27, AFP - The United States on Friday cleared the way
for a merger between US carriers United and Continental that will create
the world's biggest airline, officials and the airlines said.
"The department has closed its investigation into the proposed merger
of UAL Corporation, the parent of United, and Continental," the
Department of Justice said in a statement.The DOJ ended its probe after
the companies agreed to lease landing and takeoff rights at Newark
International Airport in New Jersey to Southwest Airlines to avoid anti
trust concerns.
"The department conducted a thorough investigation," it added in a
release that came one month after European regulators cleared the way
for the merger, now expected to take place by October 1.
Shareholders must still vote on the plan. Both companies have
scheduled special stockholder meetings on September 17, they said in a
joint statement issued late Friday.
"We are pleased to have achieved this critical milestone and look
forward to our respective stockholders' votes next month, following
which we expect to be on track to close our merger by October 1st," said
Glenn Tilton, UAL Corporation chairman, president and CEO.
Continental's chairman, president and CEO Jeff Smisek said the
Justice Department's decision "is an important step on our journey of
creating the world's leading airline" and "permits us to clear one of
the last regulatory hurdles to closing our merger."
The new airline will fly under the United Airlines name and will hold
around seven percent of global airline capacity. It has a market value
pegged at around 6.75 billion dollars (5.2 billion euros).
The new airline will serve more than 144 million passengers per year
with 370 destinations in 59 countries.
The two boards are hoping to generate combined annual savings and new
revenues of up to 1.2 billion dollars by 2013.
United and Continental both had a turnover of more than three billion
dollars in 2009 but each reported losses.
Struggling with fallout from the worst recession in a generation,
terrorism and costs brought on by an Icelandic volcano that forced the
suspension of thousands of flights, airlines have been queuing up to
join forces.
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