AMR Corp, the parent company of American Airlines has been offered a deal to merge by US Airways. The merger deal has placed a value of the two airlines combined at more than $8.5 billion.
While American pilots were busy voting to ratify a new contract on Friday, the US Airway merger details emerged. The vote approving the new contract ended a year’s long dispute between management and the pilots and helped to stabilize the airline as it tries to successfully exit from bankruptcy protection.
The proposed merger would be a complete stock merger and would make AMR creditors’ owners of up to 70% of the airline’s stock and US Airways shareholders owners of the other 30%.
Differences however, still remain over important issues that need to be resolved prior to any new merger taking place. Those issues included the amount each of the companies should own in stock when the deal is completed.
The AMR creditors are asking to have closer to 80% of the stock in the merger deal. Both airlines also disagreed over the cost and revenue benefits the merger would create for each airline. The integration of two huge labor forces is also a stumbling block.