CHICAGO/NEW YORK (Reuters) – UAL Corp (UAUA.O), parent of United Airlines, will buy Continental Airlines Inc (CAL.N) for $3.2 billion, forming the world’s largest carrier in a merger that further shrinks the embattled U.S. airline industry and could drive up air fares, sources said on Sunday.
The boards of directors of both companies unanimously approved the deal, which was expected to be announced by the carriers on Monday morning, sources familiar with the discussions said. UAL and Continental declined to comment and neither airline has confirmed the votes.
If given regulatory approval, the carrier would be called United Airlines and would be based in Chicago, with over $29 billion in annual revenue, a source said. The deal would generate up to $1.2 billion in revenue and cost benefits for the combined company.
“The combined firm would have more staying power than each of them individually,” Robert Mann, airline consultant at RW Mann & Co, said. “Part of it is the consolidation provides pricing power and the opportunity for pricing power for the entire industry.”
source: http://news.yahoo.com/s/nm/20100502/bs_nm/us_united
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