Delta/Northwest Merger Could Spark Further M&A Activity

April 2008 | Top Stories

Delta Air Lines and Northwest Airlines reached a merger agreement last week to create the world's largest passenger airline, a sign of the ongoing consolidation in the aviation industry, as firms are struggling to cope with record fuel costs and waning demand. Under the term of the US$3.1bn deal, which was signed after the two companies' board's met on April 14, Northwest shareholders will receive 1.25 Delta shares for each of 236.4mn Northwest shares outstanding. This values Northwest at about US$3.6bn or US$13.10 a share, a 17% premium above Monday's closing price. If approved, the merger will create a company

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