Earlier this month, Continental Airlines and United Airlines announced a definitive merger agreement which, if approved by shareholders and regulators, would form the world’s largest airline carrier.
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Continental chairman and CEO Jeff Smisek (left) with UAL Corp. chairman, president and CEO Glenn Tilton (right) // © 2010 United Airlines |
Under the merger agreement, United Airlines parent company UAL Corp. would purchase Continental Airlines Inc. for $3.17 billion in an all-stock deal. The new combined airline would be called United Airlines under the holding company, United Continental Holdings, and would be based out of Chicago, the site of United’s headquarters.
Continental chairman, president and CEO, Jeff Smisek, will serve as a member of the combined airline’s board of directors and as CEO of the new company, while UAL Corp. chairman, president and CEO Glenn Tilton, will serve as a non-executive chairman of the combined company’s board of directors through Dec. 31, 2012, or the second anniversary of the closing — whichever takes place last. Smisek will become executive chairman of the combined company’s board after Tilton leaves.
Both companies expect the merger to have a positive impact on its carriers as it is expected to deliver $1-$1.2 billion in net annual synergies by 2013, including $800-$900 million in incremental annual revenues from an expanded customer base and additional international service. Together, both Continental and United expect to serve more than 144 million passengers annually to 370 different destinations in 59 countries worldwide.
The merger, which was unanimously approved by the boards of directors of both companies, is expected to close in the fourth quarter of 2010.
www.unitedcontinentalmerger.com
