Delta, Northwest agree to combine
By HARRY R. WEBER, AP Business Writer
Delta Air Lines Inc. and Northwest Airlines Corp., squeezed by record
high fuel prices and a slowing economy, are combining in a stock-swap deal
that would create the world's biggest carrier. The boards of both companies
gave the deal the go-ahead Monday.
Delta said the combined airline, which will be called Delta, will have
an enterprise value of $17.7 billion. It will be based in Atlanta, and Delta
CEO Richard Anderson will head the combined company.
Under the terms of the transaction, Northwest shareholders will receive
1.25 Delta shares for each Northwest share they own. The exchange ratio
represents a premium to Northwest shareholders of 16.8 percent based on
Monday's closing stock prices.
Delta Chairman Daniel Carp will become chairman of the new board of
directors and Northwest Chairman Roy Bostock will become vice chairman. Delta
President and Chief Financial Officer Ed Bastian will retain his titles.
The new board will be made up of 13 members, seven of whom will come
from Delta's board, including Anderson, and five of whom will come from
Northwest's board, including Bostock and Doug Steenland, the current
Northwest CEO. One director will come from the Air Line Pilots Association,
the union that represents pilots from both carriers.
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