AMR, US Airways Extend Merger Deadline
American Airlines parent AMR and US Airways agreed to extend their merger deadline by about a month to allow for the antitrust case filed by the U.S. Justice Department to run its course. The amended merger agreement extends the date on which either AMR or US Airways may abandon the merger from December 17 to either January 18 or the 15th day following a ruling in favor of AMR and US Airways, whichever comes later. In the event of a ruling against the companies, the new contract allows AMR or US Airways to terminate the agreement five days after the court enters a final, but appealable, order.
A Washington D.C. federal court has scheduled the trial to start on November 25.
“The boards and management teams of AMR and US Airways remain committed to completing this combination to create the new American, and the extension of this outside date is a reflection of this commitment,” said AMR chairman and chief executive Tom Horton and US Airways chairman and CEO Doug Parker in a joint statement. “Our focus is on mounting a vigorous defense and winning our court case so the new American can enhance competition, provide better service to our customers and create more opportunities for our employees.”
Separately, the companies have removed language from the merger agreement calling for a $20 million severance package for Horton, according to a September 23 Securities and Exchange Commission filing. The judge in the AMR bankruptcy case ruled on September 12 that the company must wait until after merger to pay Horton the $20 million. Plans call for Horton to step aside in favor of Parker if the merger happens.