United Air Lines and Continental Airlines formally closed their so-called merger of equals today, as United Continental Holdings–the former UAL Corporation–announced that both now operate as wholly owned subsidiaries of the new entity. The common stock of United Continental Holdings began trading today on the New York Stock Exchange under the symbol UAL.
United Continental Holdings also announced the members of its board of directors. The 16-member board includes six independent directors from each of United and Continental; two union directors; Glenn Tilton, who will serve as non-executive chairman of the board; and Jeff Smisek, who will serve as president and chief executive.
With approximately $9 billion in unrestricted cash at closing, United expects the merger will deliver $1.0 billion to $1.2 billion in net annual synergies by 2013, including between $800 million and $900 million of incremental annual revenue, from expanded customer options resulting from the greater scope and scale of the network, fleet optimization and expanded service enabled by the broader network of the combined carrier.
The new company plans to locate its corporate and operational headquarters in Chicago, while maintaining a “significant” presence in Houston, its largest hub. As a result of the merger, Continental shareholders will receive 1.05 shares of United Continental Holdings common stock for each share of Continental common stock previously held. UAL Corporation shareholders will now own some 55 percent of the equity of the holding company and former Continental shareholders will own about 45 percent.
Continental and United will immediately begin the work to fully integrate the two companies, according to United Continental Holdings. In the near term, customers can expect to interact with each carrier as they always have. Customers flying on Continental will continue to check in at continental.com, or at Continental kiosks and ticket counters, and to be assisted by Continental employees, and customers flying on United will continue to check in at united.com or at United kiosks or ticket counters, and to be assisted by United employees. Customers will continue to earn and redeem frequent-flier miles through the respective loyalty programs of Continental and United until those programs merge. The company expects that travelers will begin to see a more unified product in the spring, as the carriers integrate “key” customer service and marketing activities.