Monday, February 18, 2013

Merger roundup: It started with a phone call

There's still plenty of news emerging about the just-announced merger of US Airways and American Airlines. Here are the best pieces to catch up with the latest developments.

Andrea Ahles in Fort Worth has a story in the Star-Telegram about how the deal came together: "It started with a phone call on Nov. 29, 2011, the day that AMR Corp. filed for bankruptcy
US Airways Chief Executive Doug Parker called his former cubicle mate at American Airlines, Tom Horton, to congratulate him on his promotion to CEO of the Fort Worth-based carrier.
Parker believed that a union with American Airlines was the next logical step in industry consolidation. But a merger was the furthest thing from Horton's mind."

The Arizona Republic has an article about how the split leadership between US Airways CEO Doug Parker and AMR Corp. chief executive Tom Horton will work. Parker will be CEO of the new company and Horton will be non-executive chairman for about a year, with largely ceremonial duties. But don't feel too sad for Horton: He'll be eased out with almost $20 million in severance and lifetime flying benefits.

The Los Angeles Times has a generally pessimistic take on how the merger will affect frequent fliers and business travelers. "These guys didn't merge to make our lives better," a travel analyst in the story said. "They merged for their own purposes."

And Jon Talton, a former Observer business editor and columnist, is not happy about Parker's plan to headquarter the new American Airlines in Fort Worth, Texas and move out of Tempe, Arizona. "Parker was never a Phoenix business leader in the mold of Walter Bimson, Gene Pulliam, Dick Snell or even Del Webb. Flawed as they were, they were deeply committed to the city and its progress. Parker is one of the stateless imperial chief executives; Paradise Valley is just one of the places where he hung his hat.

Bonus observation: A transcript of Doug Parker's employee meeting is posted on the Securities & Exchange Commission website. Companies generally don't have to disclose those things, but since it's a merger, there are a lot more documents they have to file with the SEC now. You can read it here. Can you find Parker's Pulp Fiction reference?

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