Shareholders vote on Continental-United merger

Shareholders vote on Continental-United merger

Owners of some 140 million shares in Continental Airlines are meeting in Houston today to vote on a proposed merger with rival United Airlines.

Simultaneously, owners of roughly 168 million shares in UAL Corporation - the holding company whose primary subsidiary is United Airlines – will meet in Chicago to discuss the merger.

If successful, the deal is expected to close in two weeks and will create the largest airline in the world.

Results of the voting will be announced late today.

Approval will create a new airline called United based in United’s hometown of Chicago.

It will be run by Continental’s chief executive Jeff Smisek.

The deal was announced in May this year and will take the form of a stock swap.

Continental shareholders are set to receive 1.05 United shares for each share they own, while United’s shareholders will own a 55 per cent stake in the merged company, and Continental’s the remaining 45 percent.

Continental’s shares closed up 43 cents to $23.32 in late trading yesterday, while United’s shares closed up 51 cents to $22.22.

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Jeff Smisek will lead the new airline

Department of Justice

The US Department of Justice approved the proposed US$3bn merger late last month.

In order to secure approval the airlines agreed to surrender slots for 18 daily flights from New York’s Newark airport.

These will be given to low-cost carrier Southwest.