United, Continental To Announce Merger On Monday

April 30, 2010

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United Airlines and Continental Airlines are expected to announce that they are merging to form the world's largest airline on Monday, the Wall Street Journal reported on Thursday, citing unnamed sources.

Continental's board would meet on Friday and Sunday, and United's would meet on Friday, the newspaper said on its website.

United declined to comment and Continental did not immediately respond to a request for comment.

Meanwhile, a source close to the situation said concern over the share-price ratio to be used in a potential stock swap was "no longer an issue" and added that an announcement of the deal would likely be made early next week.

The two US airlines resumed merger negotiations earlier this month, two years after walking away from similar talks.

Other aspects of the potential deal have already been agreed to, including naming United chief executive Glenn Tilton as chairman and Continental CEO Jeff Smisek as chief executive, sources previously said. United would be the surviving brand and the combined company would be based in Chicago, they added.

The Journal report, citing people familiar with the matter, said that Tilton would be non-executive chairman for two years, after which Smisek would also take on that post.

Shares of United fell 1.3 percent to USD$21.47 on Thursday, while Continental rose 2.4 percent to USD$22.70.

(Reuters)