The OK to Fly High
Sure, Continental and United shareholders love the merger, but what about thepassengers?
It's been signed off on by the Justice Department, and now the Continental and United Airlines merger has the stamp of approval from the shareholders of both companies.
At a shareholder meeting in Houston on Friday morning votes representing 75 percent of Continental shares approved the merger. In Chicago a similar vote among shareholders of UAL, United's parent company, approved the measure with support from those holding nearly 84 percent of outstanding UAL stock. More than 98 percent of the voting stockholders voted in favor of the merger, which creates the largest airline in the world.
According to the terms of the merger, Continental shareholders will receive 1.05 shares of UAL stock for every Continental share, a swap valued at $3 billion.
“Our stockholders recognized the value of bringing together Continental and United to create a platform for increased profitability and sustainable, long-term growth,” Continental Chief Executive Officer Jeff Smisek, who will lead the combined airline, said in a statement.
The vote clears the last significant hurdle for the merger, which is expected to be completed Oct. 1. Smisek also hinted at upcoming layoffs on Friday, saying that the merger creates overlapping jobs.
The shareholders figure to make money off the formation of the new colossal airline, but what about airline passengers? Will they make out or get hurt by the new behemoth of the skies?
