* AMR, US Air boards approve merger, deal announcement Thurs
* AMR creditors OK merger earlier on Wednesday -sources
* Deal to value combined airline at around $11 bln -sources
* Merged American-US Air to have 12-member board -sources
* AMR unsecured creditors to be made whole plus accrued
By Soyoung Kim
NEW YORK, Feb 13 The boards of AMR Corp
and US Airways Group Inc each met on
Wednesday to approve a merger that would create the world's
largest airline with an expected market value of around $11
billion, people familiar with the matter said.
The all-stock merger, which is set to be announced early on
Thursday, would finalize the consolidation of legacy U.S. air
carriers that helped put the industry on a more solid financial
AMR's bankruptcy creditors will own 72 percent of the
combined airline, which will do business under the American
Airlines brand and be based in Fort Worth, Texas, the people
said. US Airways shareholders will own the rest.
The board approval came after AMR's unsecured creditors
committee, which includes all three of AMR's major unions, met
earlier on Wednesday to approve a proposed merger agreement, the
The merged company will have a board of 12 members: four
from US Airways including its chief executive Doug Parker, three
from AMR including chief executive Tom Horton and five to be
designated by the AMR creditors, two of the people said.
That will shrink to 11 members in 2014 after Horton steps
down following the combined company's first annual meeting, the
person added. Parker becomes chief executive of the new airline.
AMR's unsecured creditors are expected to be made whole on
their claims in the form of stock in the merged company and also
get accrued interest, the people said. AMR's shareholders will
get a small equity stake as well, they added.
All the sources asked not to be named because the matter was
not public. US Airways declined to comment while AMR
representatives could not be immediately reached for comment.
The deal comes more than 14 months after the bankrupt parent
of American Airlines filed for bankruptcy in November 2011, and
would mark the last combination of legacy U.S. carriers,
following the Delta-Northwest and United-Continental mergers.
A tie-up with US Airways would create the world's top
airline by passenger traffic and help American and US Air better
compete with United Continental Holdings and Delta Air
Some $11 billion valuation of the combined American-US
Airways compares to the roughly $12.4 billion market
capitalization for Delta, and $8.7 billion for United