What's important in a merger?
 

Financially speaking what is important in a merger? I'm looking at the income statements and balance sheets for CAL and UAL currently. UAL has total assets of a little over 24billion while CAL has assets of around 12.1bil. However, UAL has much more liabilities with 21.4bil vs CAL at 10.5bil.

When they start looking at who wants to buy who where does it go? Does the higher liabilities mean UAL is the one needing the help and CAL would be taking them over? Am I looking at these sheets right?

NWA is showing 24.5bil total assets with 17.1bil total liabilities with DAL at 33.3bil assets and 24.2bil liabilities. Both NWA and DAL have more assets than liabilities while UAL and CAL have less. AMR is pretty even but has more cash on hand.

I'm just curious who has the negotiating strong arm when it comes to CAL and UAL.

I think it depends who has the credit, the board who wants to takeover and the board who wants to be acquired. Tilton has done a less than admirable job preparing UAL to stand alone. Their bankruptcy reorganization was a joke. The only ones who were restructured were the employees. DAL got their long term debt cut from $21B down to $7. NWA did the same. They radically restructured everything. DAL is paying nearly the same lease rates on 757s as some RJs now. UAL did none of that. UAL's exit plan called for fuel in the upper $50/barrel range as I recall. DAL continues to modify their plan but prior to the bankruptcy our Pres. said we could handle $120/barrel and still be okay.

As I understand it, CAL will acquire UAL but retain the UAL name. NWA/DAL were extremely complimentary on everything but their fleets. UAL/CAL have many synergies but the IAD/EWR hubs, CLE/ORD hubs may face some anti-trust considerations or adjustments.

I had never heard about DAL and $120 that's good to know and the 757 lease rates is impressive to say the least.

I think it is going to be a merger or equals. 90% sure about it.

Besides, if anyone is going to buy the other, it will be United buying Continental!

You have a bug in Kellner's office, give me a break.