Merger Timeline

United Continental Merger Announced

The two companies jointly announced merger plans on May 3, 2010

United Continental Shareholder Approval

Shareholders from both carriers must approve the merger of United and Continental Airlines to move forward. Levi & Korsinsky is investigating a possible breach of Fiduciary Duty by the Board of Continental Airlines; Inc. Continental shareholders will receive 1.05 shares of UAL stock for each share of Continental stock. On the close of business on May 2, 2010 Continental shares were approximately at $22.68 per share for a total transaction value at around $3.5 billion.  

The investigation may show that the Continental Board did not adequately shop the company around. Continental Board of Directors agreed to a strict “no solicitation” provision and agreed to pay a $175 million termination / break up fee if the Continental shareholders reject the merger.  

Government Approvals

The United States Department of Justice (DOJ) under the Bush Administration rushed to approve the merger of Northwest and Delta Air Lines, taking fewer than seven months to do so back in 2008.

Fast forward to current day politics. Representative James Oberstar (D-MN), Chairman of the House of Representatives Transportation Committee, expects a “more serious” antitrust review of the merger proposal by United and Continental Airlines, compared with Northwest and Delta. Oberstar believes there is a “different spirit” at the Justice Department on antitrust than during the more business-friendly Bush administration.

The International Air Transport Association (IATA) reported domestic capacity of United and Continental merger would command a whopping twenty-one percent of the domestic marketplace, nosing out Delta / Northwest’s twenty percent. American Airlines ties with Southwest Airlines, controlling a fifteen percent share.  The four carriers monopolize seventy-one percent of total domestic capacity.

The government approval map shows why Chairman Obertar contends there are antitrust issues.  

Merger Transaction Closes

NMB Key to “Single Carrier Status”

The Unions will decide when to file the petition for single carrier / single transportation system status with National Mediation Board (NMB).

The next step would be the NMB granting that status. The NMB election would follow for the combined carriers. 

The following are some indication of a single carrier / single transportation system. 

• Published combined schedules or combined routes;
• Standardized uniforms;
• Common marketing, markings or insignia;
• Integrated essential operations such as scheduling or dispatching;
• Centralized labor and personnel operations;
• Combined or common management, corporate officers, and board of directors;
• Combined workforce; and,
• Common or overlapping ownership

National Mediation Board election

Once single carrier status is achieved, representation elections will be held.

Seniority integration

Negotiations commence