United Continental Holdings, Inc. (Chicago), formerly UAL Corporation, announced today (October 1) that a wholly owned subsidiary has merged with Continental Airlines, Inc., and that Continental Airlines and United Air Lines, Inc. are now wholly owned subsidiaries of United Continental Holdings, Inc., creating a world-class global airline. Today, the common stock of United Continental Holdings, Inc. begins trading on the New York Stock Exchange under the symbol UAL.
United Continental Holdings, Inc. also announced the members of its board of directors, effective Oct. 1, 2010. The 16-member board includes six independent directors from each of United and Continental, Glenn Tilton, who will serve as non-executive chairman of the board, and Jeff Smisek, who will serve as president and chief executive officer. The independent directors are Kirbyjon H. Caldwell, Carolyn Corvi, W. James Farrell, Jane C. Garvey, Walter Isaacson, Henry L. Meyer III, Oscar Munoz, James J. O’Connor, Laurence E. Simmons, David J. Vitale, John H. Walker and Charles A. Yamarone. Additionally, the board has two union directors: Stephen R. Canale and Captain Wendy J. Morse.
With approximately $9 billion in unrestricted cash at closing, United expects the merger will deliver $1.0 billion to $1.2 billion in net annual synergies by 2013, including between $800 million and $900 million of incremental annual revenue, from expanded customer options resulting from the greater scope and scale of the network, fleet optimization and expanded service enabled by the broader network of the combined carrier. On a pro-forma basis, the combined company would have annual revenues of $31.4 billion, based on results for the 12 months ending June 30, 2010.
Continental and United, operating under United Continental Holdings, Inc., will immediately begin the work to fully integrate the two companies. In the near term, customers can expect to interact with each carrier as they always have. Customers flying on Continental will continue to check in at continental.com, or at Continental kiosks and ticket counters, and to be assisted by Continental employees, and customers flying on United will continue to check in at united.com or at United kiosks or ticket counters, and to be assisted by United employees. Customers will continue to earn and redeem frequent-flier miles through the respective loyalty programs of Continental and United until those programs are combined. The company expects that travelers will begin to see a more unified product in the spring of 2011, as the carriers integrate key customer service and marketing activities to deliver a more seamless product.
The new company’s corporate and operational headquarters will be in Chicago, with a significant presence in Houston, the company’s largest hub. As a result of the merger, Continental shareholders will receive 1.05 shares of United Continental Holdings, Inc. common stock for each share of Continental common stock previously held. UAL Corporation shareholders will now own approximately 55% of the equity of the holding company and former Continental shareholders will now own approximately 45%, including in-the-money convertible securities on an as-converted basis.
On its last day (September 30), Continental reached a tentative agreement with its Flight Attendants. The company announced yesterday it has reached a tentative agreement on a new labor contract with the International Association of Machinists and Aerospace Workers (IAM) representing Continental flight attendants. The IAM is expected to hold a ratification vote in the coming weeks.
The agreement covers approximately 9,300 Continental flight attendants located throughout the United States.