April 16, 2008
Another Large Airline Merger
On Monday, Delta Air Lines reached an agreement to take over Northwest Airlines. Delta said the combined airline will have an enterprise value of $17.7 billion and over $30 billion in revenue placing it ahead of Fort Worth, Texas-based American Airlines for the top spot in the U.S. Headquarters will be in Atlanta, and Delta CEO Richard Anderson will lead the combined company. The parties will have to convince the Justice Department that the merger, creating one of the world's largest airlines, is not ant-competitive. Arguments may include a dual "failing company" defense -- each of us would fail if left alone. How two struggling companies can combine to make a healthy one is always a question. I suppose two drunken sailors could lean against each other and hold each other up.
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