A report on merger & acquisition of united


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A report on merger & acquisition of united

  1. 1. A Report on Merger & Acquisition of United Airlines & Continental Airlines Submitted to Mr. Soumen Mukherjee By Amit Kumar
  2. 2. Points to be covered……………1.Compulsion/Attractiveness of the Deal2.View on success/Failure of the deal3. Way Forward
  3. 3. A comparative Introduction……………............................Organization United Airlines Continental Airlines United Continental HoldingsFounded April,1926 July,1934 May 2010Headquater Chicago,USA Houston,USA Chicago USARevenue(FY 09-10) $ 16.335 $ 12.586 $ 23.229 billions(Annual billions(Annual billions(Annual Report 2009) Report 2009) Report 2010)Operating Income $(161)millions- $ (146)millions FY $ 976 millions FY2009,$(4438)milli 2009,$(314) ons-FY2008 millions FY2008Passenger (In 55,083 45,573 100,656millions)Presence Pacific Europe,Asia,Canada Africa,Europe,Latin Region,Europe,Latin ,Mexico,Latin America,Asia,Canad America America a,MexicoFlight in a day 3300 3000 5700
  4. 4. Route map of Continental Airlines in 2009
  5. 5. Route map of United Airlines in 2009
  6. 6. Structure of deal & Attractiveness….1. To effect the merger, Continental shareholders received 1.05 shares of UAL stock foreach Continental share; at the time of closing, it was estimated that United shareholdersowned 55% of the merged entity and Continental shareholders owned 45%.2. The U.S. Department of Justice approved the $3 billion merger and shareholders ofboth the companies approved the merger on September 17, 20103. This deal created 2nd Largest Airlines & covered 15.9% of Domestic Market & 12% ofInternational market.http://www.transtats.bts.gov/-----ReferenceOperational Structure……Together United and Continental currently fly to 370 destinations worldwide, flying 144million passengers a year, compare to Delta Airlines, flying 163million passenger a yearto 337 destinations
  7. 7. My View on Success/Failure of deal…..• Both companies are full-service airlines and have faced intense competition from low-cost operators• United Airlines parent company UAL reported a loss of $82m for the first three months of the year, after reporting a $1.1bn loss for 2009• Continental reported net losses of $282m last year• My View-Combining the two companies will create the worlds biggest airline, based on the total number of passenger-miles flown• Deal deliver savings of more than $1bn a year• The companies did not cut potential jobs , but said they expected front-line employees to be "minimally affected by the merger", with staff reductions coming from retirements and voluntary redundancy
  8. 8. Way Forward….• The Company has taken significant steps towards the operational integration of United & Continental• The company has begun to optimize the gauge & frequency of its fleet in order to meet travel demand & capitalize on its combined global network efficiently• Additional revenue generating & cost saving measures
  9. 9. Thank You!