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Delta, Northwest agree to merge, to create largest airline
NEW YORK, Apr 15 (GCTL)- Delta Air Lines and Northwest Airlines said they have agreed to merge in a deal valued at more than USD$3 billion, aiming to cut costs amid skyrocketing fuel prices and compete better globally.
Under the terms of the proposed deal, which would create the world's largest airline, Delta will acquire Northwest in an all-stock swap in which Northwest shareholders will receive 1.25 Delta shares for each Northwest share they own.
After racking up USD$35 billion in losses and finally emerging from a five-year slump in 2006, US airlines are hoping that mergers could lead to higher profitability as combined carriers reduce flights and use their increased market power to raise prices.
This merger, which could be announced at anytime, could also speed up another tie-up - that of Continental Airlines and United Airlines.
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