AMR, US Airways Merger Set To Take Off As Court Okays DoJ Settlement

(RTTNews) - AMR Corp. (AAMRQ) cleared a major hurdle in its proposed $11 billion merger with US Airways Group Inc. (LCC) after a bankruptcy court on Wednesday approved the settlement of lawsuit reached with the U.S. Department of Justice and certain states that had opposed the momentous deal.

The U.S. Bankruptcy Court for the Southern District of New York also ruled that the merger may be consummated despite the pendency of a private antitrust lawsuit.

As a result, AMR has filed with the Court that the proposed effective date of its plan of reorganization will be December 9, 2013, by when it also plans to consummate its merger with US Airways.

Fort Worth, Texas-based AMR filed for bankruptcy protection in November 2011 amid escalating costs, and in February, agreed to merge with U.S. Airways in a stock-swap deal to create a global carrier.

The deal was originally expected to close in August, but found opposition from the Justice Department, which along with six state attorneys general and the District of Columbia, filed a lawsuit in the U.S. District Court for the District of Columbia, claiming the merger would harm competition and inflate airfares.

The lawsuit was the final barrier for AMR to close the merger and exit bankruptcy. The situation turned sanguine as earlier this month, AMR and Tempe, Arizona-based US Airways settled the lawsuit with the U.S. Department of Justice and the opposing states.

Under the settlement, the airlines will divest 52 slot pairs at Washington Reagan National Airport and 17 slot pairs at New York LaGuardia Airport, as well as certain gates and related facilities to support service at those airports.

The airlines will also divest two gates and related support facilities at each of Boston Logan International Airport, Chicago O'Hare International Airport, Dallas Love Field, Los Angeles International Airport, and Miami International Airport.

Meanwhile, AMR expects that the last day of trading of all outstanding securities of AMR, including the common stock trading under the symbol "AAMRQ," and the common stock of US Airways Group Inc. (LCC) will be December 6, 2013.

Upon the close of the merger, AMR will be renamed American Airlines Group Inc., with its common stock to be listed on the NASDAQ Global Select Market under the symbol "AAL" and its preferred stock to be listed on the NASDAQ Global Select Market under the symbol "AALCP."

Further, each outstanding share of US Airways Group Inc. common stock will be converted into one share of American Airlines Group Inc. common stock and substantially all pre-Chapter 11 unsecured claims against and outstanding equity securities of AMR will be satisfied by American Airlines Group Inc. common stock or preferred stock.

The merger will create an airline behemoth that will operate more than 6,700 daily flights to 336 destinations in 56 countries. Meanwhile, since its slide into bankruptcy, AMR has reworked plane leases, cut its management and pension bills.

As for stakeholdings, US Airways shareholders will own 28 percent of the combined company, while the remainder will be held by stakeholders of AMR and its debtor subsidiaries.

AMR stock is trading at $12.01, up $0.04 or 0.33%, on a volume of 4.3 million shares.

US Airways is trading at $24.27, up $0.28 or 1.17%, on a volume of 12.4 million shares on the NYSE.