Justice department informs United and Continental antitrust review complete
United Airlines and Continental Airlines received (27-Aug-2010) notification from the Antitrust Division of the US Department of Justice (DoJ) of the completion of its Hart-Scott-Rodino Act review and the closing of its investigation of the airlines' pending merger. Continental and United announced an all-stock merger of equals on 03-May-2010, and currently expect the transaction to close by 01-Oct-2010. Both companies have scheduled special stockholder meetings on 17-Sep-2010, for approval of the merger. United and Continental received clearance from the European Commission for the proposed merger in Jul-2010, which noted its investigation found the transaction would not raise competitive concerns in Europe or on trans-Atlantic routes. [more]
Chairman of the Committee on Transportation and Infrastructure, James Oberstar, expressed (28-Aug-2010) his disappointment with the DoJ's antitrust agreement, effectively allowing the merger to proceed, stating the decision is regrettable. [more - full statement]
Rep James Oberstar: The Justice Department concluded that it had to base its decision on a very narrow set of criteria to determine whether the merger would violate existing federal antitrust laws ... This action points strongly to the need to give broader authority over such mergers to the Department of Transportation ... There must be consideration of whether a merger will inevitably trigger others, ultimately reducing the industry to a few large carriers, each of which is unwilling to compete seriously in markets dominated by one of the others. When Congress deregulated the airlines in 1978, we were promised better service, added competition, and more choices for consumers. With the United-Continental merger, our domestic carrier fleet will have shrunk to four network carriers. Moreover, each merger appears to trigger another, as carriers feel the need to get bigger in order to compete with the newly merged airlines ... This consolidation of the mainline companies into three or four mega-carriers is not what I voted for in 1978. Nor did anyone foresee three international alliances dominating the global airline market," James L Oberstar, Chairman of the Committee on Transportation and Infrastructure. Source: US House of Representatives, 28-Aug-2010.
United Airlines: "We are pleased to have achieved this critical milestone and look forward to our respective stockholders' votes next month," Glenn Tilton, Chairman, President and CEO. Source: United Airlines, 27-Aug-2010.
Continental Airlines: "The completion of DoJ's review is an important step on our journey of creating the world's leading airline. The DoJ's decision permits us to clear one of the last regulatory hurdles to closing our merger," Jeff Smisek, Chairman, President and CEO. Source: Continental Airlines, 27-Aug-2010.