Airline operator Southwest Airlines Co. (
) on Monday announced it would buy fellow airline carrier AirTran
for around $1.4 billion in a cash/stock deal.
The company will pay around $670 million in cash, with the rest
coming via Southwest stock. AirTran shareholders will receive
around $3.75 in cash and 0.321 Southwest shares for each share of
AirTran they own.
The deal is expected to close by the end of this year.
Southwest CEO Gary Kelly said the move "offers customers more
low-fare destinations as we extend our network and diversify into
new markets, including significant opportunities to and from
Atlanta, the busiest airport in the U.S. and the largest domestic
market we do not serve, as well as Washington, D.C., via Ronald
Reagan National Airport."
Southwest shares fell 40 cents, or -3.3%, in premarket trading
The Bottom Line
Shares of LUV have a .15% dividend yield, based on Friday's closing
stock price of $12.28. The stock has technical support in the
$10-$11 price area. If the shares can firm up, we see overhead
resistance around the $14 price level. We would remain on the
sidelines for now.
Southwest Airlines Co. (
) is not recommended at this time, holding a Dividend.com DARS™
Rating of 3.4 out of 5 stars.
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, as well as a detailed explanation of
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