SkyWest to acquire ExpressJet, to be merged into Atlantic Southeast

SkyWest, Inc. (St. George) announced today (August 4) that it has entered into a definitive merger agreement with ExpressJet Holdings, Inc. (ExpressJet Airlines) (Houston), whereby Atlantic Southeast Airlines, Inc. (Atlanta), SkyWest’s wholly-owned subsidiary will acquire all of the outstanding shares of common stock of ExpressJet Holdings, Inc. (“ExpressJet”) for $6.75 per share in cash, representing a net purchase price of approximately $133 million after giving effect for shares already owned by Atlantic Southeast. ExpressJet’s primary operating entity is ExpressJet Airlines, Inc. The definitive merger agreement has been unanimously approved by the SkyWest and ExpressJet boards of directors. The transaction is not subject to financing conditions, but is subject to receipt of certain regulatory approvals, approval of ExpressJet stockholders and other customary conditions. The parties currently anticipate that the transaction will close during the fourth quarter of 2010.

Atlantic Southeast Airlines (ASA) (Atlanta) has negotiated the principal terms of a new, long-term, capacity purchase agreement with Continental Airlines, Inc. (“Continental”), which is intended to become effective upon consummation of the ExpressJet merger. Upon completion of the merger, ExpressJet will become a wholly-owned subsidiary of Atlantic Southeast, with the intention of combining the operations of ExpressJet Airlines and Atlantic Southeast, subject to receipt of necessary regulatory approvals, and utilizing Atlantic Southeast’s existing facilities in Atlanta, Georgia as the operating headquarters of the combined company. The parties anticipate that both airlines will continue to operate under separate airline operating certificates until the regulatory process can be completed for combining the airlines under a single operating certificate. Pending receipt of that single operating certificate, Atlantic Southeast intends to transition certain existing ExpressJet support functions to Atlantic Southeast and SkyWest upon consummation of the transaction. Atlantic Southeast and SkyWest believe that ExpressJet employees and passengers will benefit from the merger by building greater efficiencies of scale and capitalizing on growth opportunities.

Copyright Photo: Michael B. Ing. The ExpressJet brand was being retained for its charter division but will now gradually disappear with the upcoming merger. One surprising factor is the diverse fleet differences between ExpressJet (an Embraer operator) and Atlantic Southeast (a Bombardier operator). Embraer ERJ 145XR N11194 (msn 14500940) arrives at Ontario, CA.