US Airways Announces Bid to Purchase Delta
RENEE MONTAGNE, host:
Our business news starts with word that U.S. Airways wants to buy Delta.
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MONTAGNE: U.S. Airways, which merged last year with America West, is looking for yet another partner. U.S. Airways confirmed this morning that it's made an offer to buy Delta Airlines for $8 billion in cash and stock. If approved, the merger would be completed once Delta emerges from bankruptcy. NPR's Jack Speer has more.
JACK SPEER: The proposed merger of U.S. Airways and Delta would create one of the largest airlines in the world - number one in transatlantic routes with service to 350 destinations on five continents. U.S. Airways chairman and CEO Doug Parker talked about the merger on U.S. Airways' Web site today. He said the proposal would benefit both the carriers and their costumers.
Mr. DOUG PARKER (Chairman and CEO, U.S. Airways): Today, what we did is we put in an actual bid that we went public with right away so that people could see what it is that we really are offering. And we think it's a lot, and we think it's compelling.
SPEER: What U.S. Airways is offering is $4 billion in cash, and another $4 billion in stock to acquire Delta. That would be 25 percent premium for Delta's shareholders. Delta has been a rumored takeover target for a number of big airlines. Just last month, Delta CEO Gerald Grinstein said he was concerned about whether a merger of the two airlines could gain antitrust approval.
He noted the airlines have big hubs in close proximity: Delta in Atlanta, and U.S. Airways in Charlotte. In detailing the proposed merger with regulators, U.S. Airways says it expects the deal to generate more than $1.6 billion in annual cost savings. There's no information yet on layoffs. Jack Speer, NPR News, Washington. Transcript provided by NPR, Copyright NPR.