United-Continental merger cleared
28 Aug 2010
This time the deal appears to be for keeps with the US Justice Department saying it had closed its review of a proposed merger between United and Continental airlines after a ''thorough investigation.'' The all-stock deal will result in an entity that will overtake Delta as the largest domestic carrier with 21 per cent capacity, as compared to Delta's 20 per cent.
The merged carrier will now also operate an extended network to Asia, Europe and Latin America.
By way of a concession to competition concerns Continental has agreed to lease 18 pairs of takeoff and landing slots at Newark Liberty International Airport to Southwest Airlines.
Post-ratification the merged entity will be called United Continental Holding Inc which will operate the two companies as separate airlines for a year until it is issued a single operating certificate by the Federal Aviation Administration.
The combined company will keep the United name and will be based in Chicago where it will be run by Continental chief, Jeffery A Smisek.
United and Continental said they now expect to complete their merger by 1 Oct. after a shareholder vote by the middle of September. The deal itself was approved in record time by the government even as market observers were expecting it to take till year-end for approval to come through.
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