By Dow Jones Business News, September 23, 2013, 08:55:00 AM EDT
AMR, US Airways Extend Merger Termination Date
American Airlines parent AMR Corp. and US Airways Group Inc. ( LCC ) said Monday they agreed to extend the termination
date of their merger agreement by a month to Jan. 18 to allow for a trial in which they intend to challenge U.S. Justice
Department objections to the deal.
As expected, the pair pushed back the outside date by which either party may terminate the agreement, which had been
Dec. 17. They notified the Securities and Exchange Commission on Monday that if there is an unfavorable ruling by the
U.S. District Court judge in Washington, D.C. who will hear the case, the two may terminate the merger agreement five
days after the judge enters a final, but appealable, order enjoining the combination. If the judge rules in their favor
on or before Jan. 17, the companies said, either side could terminate the accord on the 15th day following that order.
The trial is slated to begin Nov. 25.
Tom Horton, AMR's chief executive officer, and Doug Parker, CEO of US Airways, said in a statement that both airlines'
boards and management teams remain committed to completing the transaction and the extension of the merger termination
date reflects that.
"Our focus is on mounting a vigorous defense and winning our court case so the new American can enhance competition,
provide better service to our customers and create more opportunities for our employees," they said.
The proposed stock-swap combination is AMR's plan to emerge from bankruptcy-court protection. AMR creditors, US
Airways shareholders, both airlines' boards and most of their unions and European Union regulators have approved that
path to exit. But the Justice Department on Aug. 13 surprised nearly everyone by challenging the transaction, saying it
would raise fares and fees, rob consumers of choices and essentially create an oligopoly in which the top four U.S.
airlines would control more than 80% of domestic capacity.
US Airways and AMR disagree, and have questioned why the Justice Department is attempting to stop their combination
when the agency has allowed four other large airline mergers since 2005. Without a merger, American and US Airways
contend they won't be able to scale up to provide a counter-weight to United Continental Holdings Inc. and Delta Air
Lines Inc., two companies that have bulked up through recent mergers and now are far larger than American in traffic.
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