Sept. 25 (Bloomberg) -- Delta Air Lines Inc. and Northwest Airlines Corp. shareholders backed a merger of the companies, leaving a federal antitrust review as the final hurdle to creating the world's largest carrier.

The votes came today at Northwest's annual meeting in New York and at a special session convened by Delta in its hometown of Atlanta. Delta's all-stock acquisition of Eagan, Minnesota- based Northwest is valued at $2.65 billion.

The combination of Delta, the third-largest U.S. carrier, and No. 6 Northwest would surpass AMR Corp.'s American Airlines as the world's biggest carrier by traffic. Delta and Northwest agreed to merge to take advantage of their international networks and growing cargo and maintenance units as higher fuel costs damped demand for U.S. travel.

It's a ``reasonable expectation'' that antitrust regulators at the U.S. Justice Department will issue a decision by mid- November, Delta Chief Executive Officer Richard Anderson said. The deal will probably close by year end, he said.

Shareholders also approved a stock compensation plan to give 15 percent of the new company's shares to employees. Executives will get 3.5 percent, with an additional 1.6 percent set aside for future management awards; Delta pilots will receive 3.5 percent; Northwest pilots will get 2.4 percent; and another 4 percent will go to other employees.

Company's Name

The merged company will keep Delta's name and Atlanta headquarters and be run by Anderson. It will have $35 billion in annual revenue, with 800 aircraft and 75,000 employees.

Delta has already won approval from European antitrust regulators, and the carriers have 26 merger integration teams working on how to mesh their fleets, technology, facilities and other operations.

Anderson reiterated the $2 billion target for cost savings and new revenue from the merger and said there's ``probably more upside for those numbers.'' Delta has said integration costs will be $600 million over three years, less than its initial estimate of $1 billion.

The combined company would have Delta's trans-Atlantic routes to Europe and its Latin American network, as well as Northwest's Pacific routes including access to the restricted Narita airport in Tokyo.

Adding overseas flying was part of each airline's strategy to return to profit after bankruptcy. Delta exited court protection in April 2007 and Northwest emerged a month later.

Cost Cutting

Delta, Northwest and other U.S. carriers are cutting 26,000 jobs and parking 460 planes as they slash domestic capacity by at least 10 percent. The moves are aimed at lowering costs and trimming available seats in a bid to increase fares and cope with jet-fuel prices that have risen 40 percent in the past year.

The value of the transaction, based on an exchange of each Northwest share for 1.25 Delta shares, has declined 27 percent from $3.63 billion when the merger was announced April 14.

Delta rose 3 cents to $8.06 at 4:15 p.m. in New York Stock Exchange composite trading. Northwest fell 11 cents, or 1.1 percent, to $9.88.

Among the 70 percent of Delta shares voted, 99 percent favored the all-stock deal.

To contact the reporter on this story: Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net. Greg Bensinger in New York at gbensinger1@bloomberg.net

Last Updated: September 25, 2008 16:29 EDT