DELTA AIR Lines and Northwest Airlines emerged from months of merger talks with an accord expected to create the world's largest carrier, reshape the US aviation industry and spur rivals to pursue deals of their own.
The agreement, approved by both companies' boards, comes as airlines contend with record fuel costs, restless investors and an economic slowdown that may sap demand for air travel.
Those brutal market conditions helped persuade Delta and Northwest executives to press ahead with a deal that appeared to slip away from them more than a month ago, when talks stalled following an impasse between the two pilots unions over their members' seniority.
In the proposed stock swap, investors will receive 1.25 shares of Delta for each Northwest share they own. The deal values Northwest at about $3.6 billion (€2.28 billion), or $13.10 a share, a 17 per cent premium above Monday's closing price. The tie-up creates a company with more than $35 billion in annual revenues, a mainline fleet of almost 800 planes and a workforce of 75,000 people.
The carriers said their merger would generate more than $1 billion in revenue and cost savings
However, the merger is certain to draw scrutiny in Washington. Antitrust regulators have been critical of airline mergers in the past, especially those in which neither company is on the cusp of liquidation. - ( Financial Times service )
