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Southwest Airlines will finally land at Hartsfield-Jackson Atlanta International Airport through its $1.4 billion acquisition of AirTran Airways.
Dallas-based Southwest (NYSE: LUV) announced a definitive agreement to acquire all of the outstanding common stock of AirTran Holdings Inc. (NYSE: AAI), the Orlando, Fla.-based parent company of AirTran, for a combination of cash and Southwest's common stock. AirTran's biggest hub is Hartsfield-Jackson.
Including the assumption of debt and capitalized aircraft operating leases, the deal is worth $3.4 billion.
“Joining Southwest Airlines will give us opportunities to grow, both professionally as individuals and as a group, in ways that simply would not be possible without this agreement,” said Bob Fornaro, AirTran Airways chairman, president and CEO. “This agreement with Southwest is a testament to the success and hard work of the more than 8,000 AirTran crew members who have built this airline. I am tremendously proud of the things we have accomplished together and look forward to continuing that great work during this next exciting chapter of our history."
The agreement has been unanimously approved by the boards of directors of each company, the companies said. Closing is subject to the approval of AirTran stockholders and regulatory approval and is expected in the first half of 2011. Commercial and operating integration is set for 2012.
Southwest Chairman, President and CEO Gary Kelly said the deal will allow Dallas-based Southwest to grow in existing markets, as well as cities it doesn't yet serve, including Atlanta, Washington Reagan, New York LaGuardia, Boston, Baltimore/Washington, the Caribbean and Mexico.
The two airlines currently serve 106 cities with 685 all-Boeing aircraft and nearly 43,000 employees.
"As we approach our 40th anniversary of providing exceptional customer service at everyday low fares, the acquisition of AirTran represents a unique opportunity to grow Southwest Airlines' presence in key markets we don't yet serve and takes a significant step towards positioning us for future growth," Kelly said in a statement.
At Southwest's closing stock price Friday of $12.28, the Southwest-AirTran transaction values AirTran common stock at $7.69 per share, or $1.4 billion total, including AirTran's outstanding convertible notes. This represents a premium of 69 percent over Friday's closing price of AirTran stock.
Under the agreement, each share of AirTran common stock will be exchanged for $3.75 in cash and 0.321 shares of Southwest Airlines' common stock, subject to certain adjustments, based on Southwest Airlines' share price prior to closing.
Southwest has annual revenue of $11.2 billion. AirTran’s annual revenue is $2.5 billion. Both airlines are profitable. The combined airlines will have nearly 43,000 employees.
Southwest said it will fund the cash portion of the acquisition with money on hand
Dallas-based Southwest (NYSE: LUV) announced a definitive agreement to acquire all of the outstanding common stock of AirTran Holdings Inc. (NYSE: AAI), the Orlando, Fla.-based parent company of AirTran, for a combination of cash and Southwest's common stock. AirTran's biggest hub is Hartsfield-Jackson.
Including the assumption of debt and capitalized aircraft operating leases, the deal is worth $3.4 billion.
“Joining Southwest Airlines will give us opportunities to grow, both professionally as individuals and as a group, in ways that simply would not be possible without this agreement,” said Bob Fornaro, AirTran Airways chairman, president and CEO. “This agreement with Southwest is a testament to the success and hard work of the more than 8,000 AirTran crew members who have built this airline. I am tremendously proud of the things we have accomplished together and look forward to continuing that great work during this next exciting chapter of our history."
The agreement has been unanimously approved by the boards of directors of each company, the companies said. Closing is subject to the approval of AirTran stockholders and regulatory approval and is expected in the first half of 2011. Commercial and operating integration is set for 2012.
Southwest Chairman, President and CEO Gary Kelly said the deal will allow Dallas-based Southwest to grow in existing markets, as well as cities it doesn't yet serve, including Atlanta, Washington Reagan, New York LaGuardia, Boston, Baltimore/Washington, the Caribbean and Mexico.
The two airlines currently serve 106 cities with 685 all-Boeing aircraft and nearly 43,000 employees.
"As we approach our 40th anniversary of providing exceptional customer service at everyday low fares, the acquisition of AirTran represents a unique opportunity to grow Southwest Airlines' presence in key markets we don't yet serve and takes a significant step towards positioning us for future growth," Kelly said in a statement.
At Southwest's closing stock price Friday of $12.28, the Southwest-AirTran transaction values AirTran common stock at $7.69 per share, or $1.4 billion total, including AirTran's outstanding convertible notes. This represents a premium of 69 percent over Friday's closing price of AirTran stock.
Under the agreement, each share of AirTran common stock will be exchanged for $3.75 in cash and 0.321 shares of Southwest Airlines' common stock, subject to certain adjustments, based on Southwest Airlines' share price prior to closing.
Southwest has annual revenue of $11.2 billion. AirTran’s annual revenue is $2.5 billion. Both airlines are profitable. The combined airlines will have nearly 43,000 employees.
Southwest said it will fund the cash portion of the acquisition with money on hand
