Originally Posted by
dera
Usually?
Give me an example.
Look at any acquisition where a vertical integration is taking place and the seller wants to ensure continued business with the parent entity afterwards. This is to allay SkyWest shareholder fears.
This acquisition by Unktef has been brewing for quite a while. Bloomberg reported it months ago. During the negotiations of this transaction alone, immediately after the CRJ700 retirement was announced by United, United prematurely renewed SkyWest’s CRJ700’s for 5 more years. This was to take off the table SkyWest business.
These agreements are intended to signal to the seller’s shareholders that, in the long term, the seller is not conceding business by selling a competitor to your customer and removing a barrier to entry to your customer of starting from scratch.
The terms of this agreement will make it into the quarterly reports and earnings call. We will all know more then. I believe the agreed to terms will be stronger than a “promise”. My only question, as a Mesa pilot, is if they affect Mesa.