American and US Airways Extend Merger Agreement by at Least a Month
CHARLOTTE, N.C. (TheStreet) -- American
The merger's future is now in the hands of the U.S. District Court in Washington, where Judge Colleen Kollar-Kotelly has scheduled a hearing to begin Nov. 25.
The merger agreement had previously enabled termination by either party on Dec. 17. The new agreement extends that date to either Jan. 18, 2014, or to a later date if the court enters an order favoring the airlines on or before Jan. 17, in which case the deadline is extended until the 15th day after the judge's order is entered. The airlines appear to believe that is sufficient time for a favorable resolution.
If the ruling is unfavorable, the two carriers "may terminate the merger agreement five days after the court enters a final, but appealable, order permanently enjoining the merger," the carriers said in a prepared statement.
The five days would allow both sides time to assess their options.
In a joint statement issued Monday, American CEO Tom Horton and US Airways CEO Doug Parker said: "The boards and management teams of AMR and US Airways remain committed to completing this combination to create the new American, and the extension of this outside date is a reflection of this commitment.
"Our focus is on mounting a vigorous defense and winning our court case so the new American can enhance competition, provide better service to our customers and create more opportunities for our employees," they said.
-- Written by Ted Reed in Charlotte, N.C.
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