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35

Delta, Northwest: Will You "Marry" Me?

Two giants Delta Air Lines and Northwest Airlines came to a merge agreement late Monday, in a $3.1 billion deal that would result in the world's biggest airline and could incite other airlines to perform mergers of their own

Two giants Delta Air Lines and Northwest Airlines came to a merge agreement late Monday, in a $3.1 billion deal that would result in the world's biggest airline and could incite other airlines to perform mergers of their own.

Delta and Northwest have agreed to stick with many elements of the tentative pact they reached more than a month ago, including the location of the combined company's headquarters – Delta's hometown of Atlanta – and its leader – Richard Anderson, Delta chief executive.

The agreement would swap Northwest shares for those of Delta. The deal will value Northwest’s equity at close to its current market capitalization of about $3bn, pounds 1.52bn, people close to the situation said.

Northwest shareholders would receive 1.25 Delta shares for each of 236.4 million Northwest shares outstanding.

The Atlanta-based carrier has long been viewed as a key player in consolidation among the US's legacy airlines because of it enviable route network, its recent emergence from bankruptcy and the absence of any previous agreement that would limit its ability to merge with a rival.