How was the merger between United and Continental structured

How was the merger between United and Continental structured? Which is the survivor? Who holds what stock after the merger?

Solution

The merger process started in May 2010 and took a considerable time to get an operating certificate. Both the airlines had taken losses in the recession and expected the merger to generate savings of more than $1 billion a year One reason to merge was to reduce costs and one way to do that was by consolidating information technology (IT) systems. The Board of Directors at Continental and United Airlines approved a stock-swap deal that would combine them into the world\'s largest airline on May 2, 2010. The agreement was executed on 1 October 2010, forming United Continental Holding Inc. (United). A merger agreement was reached between United and Continental Airlines. To effect the merger, Continental shareholders received 1.05 shares of UAL stock for each Continental share, effectively meaning Continental was acquired by UAL Corporation At the time of closing, it was estimated that United shareholders owned 55% of the merged entity and Continental shareholders owned 45%