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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
risks.

'US Airways continues to experience significant integration problems and has
not completed its prior, much smaller merger with America West,' the company
said. 

'It is not equipped to simultaneously integrate a substantially larger
company,' it added.

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