United, Continental merger creates world’s biggest airline
04 May 2010
With a 21 per cent share of the domestic market and 7 per cent share of the global market.
The deal was completed in a remarkably short time of two weeks probably because it was a revival of failed talks from two years ago when Continental walked away from a done deal at the last minute on concerns about United's financial health.
Unlike the last time around, when Continental was set to buy out United, the tables have been turned and it's United that's buying out Continental in an all-stock deal which values the acquisition at $3.17 billion, based on Friday's closing price.
The merger is expected to be completed before the end of the year.
The combined company will retain the United name and be based in Chicago. However, it will be Continental's chief executive, Jeffery A Smisek, who will run the company.
United's chairman, Glenn F Tilton, would retain his place for two years, after which Smisek takes over as executive chairman.
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