United Air Lines and Continental merge

Continental Airlines Inc and United Air Lines have officially merged, creating a new world-class global airline. Both companies are now wholly-owned subsidiaries of United Continental Holdings Inc which began trading yesterday on the New York Stock Exchange under the stock symbol UAL.

The board of directors has been announced and will have 16 members. There will be six independent directors from Continental and United, and there will also be two directors from the trade unions.

The new airline’s operational and corporate headquarters will be in Chicago, Illinois. They will also have a big presence in Houston, Texas, which is the company’s largest hub.

Shareholders of UAL Corporation will now own about 55 percent of the equity of the holding company and the shareholders of the former Continental will have 45 percent which includes in-the-money convertible securities on an as-converted basis. Because of the merger, Continental shareholders will receive 1.05 shares of the United Continental Holdings Inc.

There was about $9 billion in unrestricted cash at the closing of the deal. There should be about $1.0 to $1.2 billion in net annual synergies by 2013, and annual revenues should be around $31.4 billion. This is based on an average twelve months that ended on June 30th this year.