Merger Will Result in Loss of Airline Jobs in Chicago
Sunday, May 2nd, 2010Continental and United Airlines have agreed to merge, which many say will result in the loss of hundreds of airline jobs in Chicago and in other parts of the United States where Continental has established hubs (click here).
A formal announcement will come on Monday.
According to Chron.com, the carrier will be based in United’s home of Chicago and take United’s name, the sources said. Jeff Smisek, chairman, CEO and president of Houston-based Continental, will be CEO of the merged carrier and he will have offices in Houston and Chicago, they said.
United’s CEO Glenn Tilton will become non-executive chairman until Dec. 31, 2012, or on the second anniversary of the closing of the deal, whichever is later. Then Smisek takes the helm as chairman.
The deal — which had earlier bogged down over price — will be an all-stock swap. Continental shareholders get 1.05 United shares for each Continental share they own.
That values the deal at about $3.2 billion, based on Friday’s closing share prices and the latest publicly available outstanding shares. United’s shareholders will own a 55 percent stake in the merged company with Continental’s shareholders holding the remaining 45 percent.
Houston is expected to be the largest hub of the combined carrier and continue to be its gateway to Latin America. Continental employs 16,500 people in Houston and the sources said it should remain a top private employer in the city.