Continental Airlines and United Airlines merge in USD3bn stock swap deal

Continental Airlines and United Airlines reportedly agreed to merge in a stock swap deal, valued at more than USD3 billion, to create the world's largest carrier carrying 21% of all US air passengers (Bloomberg/Houston Business Journal/Denver Business Journal, 02-May-2010). United is expected to swap 1.05 shares for each Continental share. The combined carrier would be based in Chicago with Continental CEO, Jeff Smisek, as CEO and United's Glenn Tilton as Chairman. The carrier would operate under the United Airlines brand. Most of the merger groundwork was already in place from previous merger discussions in 2008 which Continental walked away from in favour of joining the Star Alliance (Reuters, 15-Apr-2010). United was previously in merger talks with US Airways until 23-Apr-2010.