B757300 From United States of America, joined Dec 2000, 4114 posts, RR: 22 Posted (14 years 2 months 1 week 4 days 20 hours ago) and read 1691 times:
Justice Dept. Clears Airline Merger
By KAREN GULLO
.c The Associated Press
WASHINGTON (AP) - The Justice Department announced Friday it will not challenge the proposed acquisition of TWA by American Airlines.
The department's Antitrust Division put out a brief statement saying it had decided to let the transaction go forward after investigating the merger and taking into account TWA's bankrupt condition.
Under the proposed deal, American would pay $742 million for most of TWA's assets, including up to 190 planes and the St. Louis hub. It also would pay $82 million for a 49 percent stake in DC Air, a minority-owned start-up of United and US Airways that would serve 44 markets out of Washington's Reagan National Airport.
Just this week the CEO of TWA told a federal bankruptcy court he would be forced to liquidate his carrier if a sale for most of its assets to AMR Corp.'s American Airlines was not approved.
American's bid includes the assumption of $3.5 billion in aircraft leases. It was announced in principle Jan. 10 - the same day that TWA filed for bankruptcy for the third time in less than a decade.
The deal will reshape the industry and retire one of the most storied names in aviation history. TWA, which traces its roots to the 1925 founding of Western Air Express, once catered to popes and movie stars and was owned at one time by Howard Hughes.
It held the world's attention during a 1985 hijacking in Beirut and the 1996 crash of a flight from New York to Paris.
But the airline hasn't turned a profit since 1988 and has filed for bankruptcy twice before.
It lost $115.1 million in the first nine months of 2000 and $353 million in 1999. TWA said an increase in oil prices pushed it into bankruptcy this time.
Accounting for TWA's business, the new American would control 22.6 percent of the airline market, congressional investigators have estimated.
TWA has 20,000 employees, and American officials have said that American would offer jobs to all 17,600 unionized workers, including about 2,300 pilots.
Copyright 2001 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. All active hyperlinks have been inserted by AOL.
LoneStarMike From United States of America, joined Jul 2000, 3948 posts, RR: 31
Reply 2, posted (14 years 2 months 1 week 4 days 19 hours ago) and read 1650 times:
What I find ironic about the whole deal is that United announced its intention to merge with US Airways months ago (wasn't it sometime last spring or early summer?). AA comes along and announced its intentions to merge with TWA in January and BOOM! 2 months later it's pretty much a done deal. Meanwhile, they're still trying to work out the details of the United US Airways merger. Seems like AA kind of one-upped United again.
Ctbarnes, regarding the Karabu agreement, here's a brief excerpt from Tuesday's (March 13) Daily Banter from planebusiness.com:
Of course, the big news over the weekend and into yesterday was the fact that the bankruptcy court gave American the nod to take over the assets of TWA. Talk about a lot of wailing and gnashing of teeth. There was plenty, in terms of the testimony that was presented to the court. But, in the end, Carl the Terrible was vanquished, American got the goods, JAG never came up with their money, and Karabu is now but a distant, albeit ugly, memory.
Of course, this does not mean that we don't fully expect a lawsuit to be filed, if not more than one, from at least Icahn, if not other unhappy suitors who were parties to the event.
All those folks have another 8 days to get those appeals filed.
Obviously, they now have less than 8 days and I haven't kept up with further developments since then.