caflyer

Here it is:





BUSINESS | APRIL 23, 2010, 8:07 P.M. ET

UAL-Continental Talks Quicken, Could Yield Merger by Early May

By GINA CHON

Negotiations between UAL Corp.'s United Airlines and Continental Airlines Inc. are picking up pace, with parties believing a merger deal could be reached at the end of this month or early May, people familiar with the matter said Friday.

United Airlines would be the surviving brand if it was to merge with Continental, these people said.

If a deal goes through, the new company would be based in Chicago, where United currently has its headquarters. A tie-up between Continental, which is based in Houston, and United would create the world's largest airline by traffic.

Both parties are feeling optimistic after US Airways announced Thursday that it had ended merger talks with United, people familiar with the matter said.

But they cautioned that talks could fall apart at the last minute as they did in 2008, the last time the two airlines seriously considered a merger.

These people said a merger likely would be in the form of a stock swap. Jeff Smisek, Continental's chairman and CEO, would become CEO of the combined company, while UAL Chairman and CEO Glenn Tilton would become chairman.

UAL sports a market capitalization of $3.85 billion, while Continental has a market value of about $3 billion.

A combined United-Continental would overtake Delta as the largest airline by traffic and leave AMR Corp.'s American Airline as a relatively distant third.

Talks between United and Continental began last week, after media reports about the United-US Airways talks came out. Some Analysts think United and Continental would be a better fit.

Write to Gina Chon at [email protected]
__________________