(Adds more information)
NEW YORK, Sept 27 Southwest Airlines (LUV.N)
said it would acquire low cost rival AirTran Holdings Inc
AAI.N for about $1.04 billion in cash and stock to compete
more closely with Delta Air Lines (DAL.N) and other big
carriers in the eastern U.S. For details see [ID:nSGE68Q0GW]
Below are facts about the deal and the two carriers:
* The deal is worth $1.04 billion in cash and common
shares, but jumps to nearly $1.4 billion when AirTran
convertible notes are included.
* There is no estimate for when the transaction will close
or how long antitrust officials at the U.S. Justice Department
will take to review the proposal.
* Each AirTran share will be exchanged for $3.75 in cash
and 0.321 shares of Southwest common stock, subject to certain
adjustments intended to provide at least $7.25 in value and up
to $7.75 in value per share of AirTran common stock.
* AirTran revenues and operating income, excluding special
items, for the 12 months ending June 30, 2010, were $2.5
billion and $128 million, respectively. Southwest revenues and
operating income, excluding special items, for the 12 months
ending June 30, 2010, were $11.2 billion and $843 million,
* Net annual synergies are expected to exceed $400 million
by 2013. One-time costs related to the acquisition and
integration of AirTran are expected to be in the range of $300
million to $500 million.
* As of June 30, 2010, the combined unrestricted cash and
short-term investments of the two companies was $3.7 billion.
Southwest intends to fund about $670 million in cash
consideration for the transaction out of cash on hand. Since
June 30, Southwest's cash and short-term investments balance
has increased from $3.1 billion to $3.3 billion.
* Based on current operations, the combined organization
would have nearly 43,000 employees and serve more than 120
million passengers annually.
* The combined carriers' all-Boeing fleet would total 685
active aircraft, including 401 Boeing 737-700s, 173 Boeing
737-300s, 25 Boeing 737-500s, and 86 Boeing 717s, with an
average age of approximately 10 years, one of the youngest
fleets in the industry.
* Until closing, Southwest Airlines and AirTran will
continue to operate as independent companies. After closing,
AirTran CEO Bob Fornaro will continue to be involved in the
integration of the two companies.
* Southwest Airlines plans to integrate AirTran into the
Southwest Airlines Brand by transitioning the AirTran fleet to
the Southwest Airlines livery and consolidating corporate
functions into its Dallas headquarters. Frequent flier programs
will be combined over time.
* Southwest flies 3,200 flights a day to 69 U.S. cities.
Headquartered at Dallas Love Field. Incorporated in 1971 with
three aircraft serving three Texas cities. It currently
operates 544 Boeing 737 jets, which fly an average of six
flights a day. It has been profitable for 37 straight years.
* AirTran serves 71 cities, mostly on the U.S. East Coast,
the Midwest and the Caribbean. Headquartered in Orlando,
Florida, with a hub in Atlanta. Fleet includes 86 Boeing 717s,
52 Boeing 737s. First commercial carrier to offer XM Satellite
Radio in every seat on every flight. Profitable nine out of
last 10 years. Formerly ValuJet.
Source: Southwest.com, AirTran.com, Southwest Airlines,
(Editing by Maureen Bavdek, Bernard Orr)