Late Sunday newswire services were reporting that the boards of United Airlines and Continental Airlines had agreed to a merger, a move that would create the world’s largest airline in terms of passenger numbers. The two airlines reportedly have agreed to an exchange ratio of 1.05 shares of UAL for each Continental share in an all-stock deal. Based on United’s stock price on Friday, United would pay $3.2 billion for Continental.
United shareholders reportedly would own 53 percent of the new company, which would be known as United, based on Chicago. UAL Chairman and CEO would become non-executive chairman of the newly combined airlines and Continental CEO would become CEO of the merged carrier. The two airlines began merger talks earlier this month, after breaking off similar negotiations two years ago. United also had merger talks with US Airways, but those negotiations ended without an agreement. United pilots have indicated that if certain conditions were met, they would approve of the deal. For more information, visit www.united.com or www.continental.com.
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