Merger talks between United Airlines and Continental Airlines reached an impasse over the weekend over a disagreement about the price of a deal, people involved in the negotiations said. More specifically, the two companies have not been able to reach an agreement over the value of the stock prices used to compute the exchange ratio in a stock-for-stock deal, these people said. The ratio would affect the price United would ultimately pay for the deal. Many other elements of a potential merger had already been agreed upon, including keeping the United name.The companies had also settled on naming United’s chief, Glenn F Tilton, as chairman and Continental’s chief, Jeffery A Smisek, as chief executive of the combined airline.But one person involved in the discussions described the disagreement over the stock ratio as a potential deal-breaker for the talks, though the companies are continuing to negotiate. The chief executives of the two airlines spoke on Friday and Saturday about the exact ratio of shares that United planned to pay for Continental, these people said. It was their first discussion about a stock exchange ratio since the two airlines resumed merger talks more than a week ago.
The above article was extracted from Skyline updates of Skyline College. Skyline College is amongst the top MBA and BBA institutes in Delhi, Gurgaon (NCR).
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