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$11 Billion Merger to Create World’s Largest Airline

American AirlinesAfter months of negotiation, the long-anticipated merger between US Airways (NYSE:LCC) and bankrupt AMR‘s (PINK:AAMRQ) American Airlines is finally a reality.

The two carriers announced on Thursday that they will combine operations in an all-stock deal worth $11 billion, creating an airline with 2% more air traffic than United Continental (NYSE:UAL), Reuters noted.

Investors didn’t seem impressed. Shares of US Airways fell more than 2% in Thursday morning trading.

Under terms of the merger, the combined airline will take the American Airlines name. AMR’s creditors will hold a 72% stake in the company, which will be based in Dallas-Forth Worth. US Airways CEO Doug Parker will head the new carrier.

The deal must still be approved by regulators and by the U.S. Bankruptcy Court. Critics warn that the combination will mean reduced competition and higher prices for passengers.

AMR has been seeking a merger partner for American Airlines since early last year.


Article printed from InvestorPlace Media, https://investorplace.com/2013/02/11-billion-merger-to-create-worlds-largest-airline/.

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