As expected, Delta Air Lines Inc. and Northwest Airlines Corp. announced they have agreed to a $17.7 billion merger deal, creating the world's second-largest carrier.
The combined airline, which is to be called Delta, would have more than $10 billion in assets, placing it second to Air-France KLM.
The new Delta "will provide employees with greater job security, an equity stake in the combined airline, and a more stable platform for future growth in the face of significant economic pressures," the companies said in a joint statement.
Under terms of the deal, Northwest shareholders would receive 1.25 Delta shares for each share they own.
The combined company would be headquartered in Atlanta and led by current Delta chief executive officer Richard Anderson. Seven members of the new board will come from Delta and five will come from Northwest, the companies said.
Northwest, which is based in Eagan, Minn., owns a minority stake in Midwest Air Group Inc., the Oak Creek-based parent company of Midwest Airlines.
However, the Delta and Northwest alliance will still need to pass regulatory hurdles to become a reality. Several Minnesota politicians, including U.S. Sen. Norm Coleman and Gov. Tim Pawlenty, both Republicans, have expressed opposition, as has U.S. Rep. Jim Oberstar, (D-Minn.), head of the House Transportation and Infrastructure Committee.
Delta and Northwest moving ahead on merger
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