Delta Air Lines (NYSE:DAL) and Northwest Airlines (NASDAQ:NWAC) agreed to merge in a deal that will create the world's largest carrier and may touch off a wave of consolidation within the US aviation industry.
The accord, reached late on Monday after the two companies' boards met separately, capped several months of negotiations that nearly ended following an impasse between the carriers' pilots. Driven by surging fuel costs, restless investors and a looming slump in demand for air travel, Delta and Northwest revived the talks earlier this month.
In the proposed stock swap, investors will receive 1 ¼ share of Delta for each Northwest share they own. The deal values Northwest at about $13.10 a share, a 17 per cent premium above Monday's closing price.
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