AMR-US Airways Merger Deadline Extended as U.S. Suit Fought
Stock Chart for US Airways Group Inc (LCC)
American Airlines and US Airways (LCC) Group Inc. agreed to extend the deadline for completing their $14 billion merger until at least Jan. 18 as the carriers fight a U.S. antitrust lawsuit to block the combination.
The boards of American parent AMR Corp. and US Airways approved moving the deadline from the original Dec. 17 date, according to a regulatory filing today. If there is a favorable order from the court on or before Jan. 17, the companies have an additional 15 days to finish the deal.
The tie-up, which would let American exit bankruptcy protection, is on hold pending resolution of the U.S. Justice Department’s suit. The airlines say the new American would have the heft to compete with larger Delta Air Lines Inc. (DAL) and United Continental Holdings Inc., while the U.S. says the merger would hurt consumers by raising fares and curbing competition.
Both companies “remain committed to completing this combination to create the new American,” Chief Executive Officers Doug Parker of US Airways and Tom Horton of American said in a statement. “Our focus is on mounting a vigorous defense and winning our court case.”
US Airways fell 0.2 percent to $18.86 at the close in New York. AMR gained 0.8 percent to $3.95.
Parker, 51, would be CEO of the combined carrier, which will keep the American name and its headquarters in Fort Worth, Texas. Horton, 52, would serve as chairman until the first annual meeting of the new American.
American and Tempe, Arizona-based US Airways also said they amended the merger agreement to drop a $20 million severance package for Horton after the judge in American’s bankruptcy case challenged the amount. American’s lawyers had agreed to the change earlier this month.
The antitrust case is U.S. v. US Airways Group Inc., 13-cv-01236, U.S. District Court, District of Columbia (Washington). The bankruptcy case is In re AMR Corp. (AAMRQ), 11-bk-15463, U.S. Bankruptcy Court, Southern District of New York (Manhattan).
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