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"Delta rejects US Airways merger plan"
Tuesday, December 19, 2006
Delta rejects US Airways merger bid
LONDON (AFX) - Delta Air Lines said its board of directors has rejected US
Airways' merger bid, saying the company's standalone reorganisation plan
will provide 'superior value, as well as a faster recovery and much greater
certainty of execution'.
US Airways made a hostile 8 bln usd bid for Delta on Nov 15.
Delta said its board found the US Airways proposal 'structurally flawed',
saying it has a high risk of running into antitrust and labour issues and
would saddle the company with a precariously high debt load.
It also said the merger depends on achieving synergies premised on 'faulty
economic assumptions' and would expose Delta to further merger-related
'US Airways continues to experience significant integration problems and has
not completed its prior, much smaller merger with America West,' the company
'It is not equipped to simultaneously integrate a substantially larger
company,' it added.
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