Shareholder Approval Paves Way for October 1 Merger of United and Continental Airlines
UAL Corp.'s United Airlines and Continental Airlines expect their proposed merger to close by October 1, now that companies have cleared the last major hurdle in their bid to create the world's largest airline. On Friday shareholders from both companies approved the transaction by a wide margin, as more than 98 percent of the votes cast by each group went in favor of the merger. UAL shareholders representing some 84 percent of the shares outstanding voted in favor of the transaction, while holders of 75 percent of the outstanding shares of Continental's stock voted to approve the merger. "This vote is a significant step toward closing our merger with Continental, creating the world's leading airline and the industry's best network for our customers, a strong company that provides career opportunity for our people and an airline that can deliver return for our shareholders," said United chairman and CEO Glenn Tilton. "There is much work ahead as we bring these two companies together, pulling the best from both of our companies, and building on the work we have each done to strengthen our airlines." Other obstacles to clear before the projected closing date include a federal lawsuit in San Francisco filed by a group of 49 passengers who allege the merger will lead to higher prices and fewer flights due to a decrease in competition. Meanwhile, Continental and United remain engaged in discussions with the state attorneys general over the merger, and hope to conclude the talks "expeditiously with a positive outcome." The U.S. Department of Justice issued its approval for the merger late last month. In July the merger received clearance from the European Commission, which noted its investigation found the transaction would not raise competitive concerns in Europe or on transatlantic routes. The airlines announced the all-stock merger on May 3. Plans call for UAL to issue 1.05 shares for each Continental share. United shareholders will own about 55 percent of the equity of the combined company and Continental shareholders will own 45 percent. The $3.2 billion merger would create the biggest airline in the world and leave the U.S. with three major international carriers: the new United, Delta and American Airlines.