DealZone

The afternoon deal: UAL-Continental ripples

Passengers are reflected in the mirror of the departure terminal as they board an aircraft to fly in the northern part of Cyprus, April 19, 2010. REUTERS/Murad Sezer The UAL-Continental merger will, no doubt, have a big impact on the two companies involved, but will the merger affect the industry, airline share prices or the experience of travelers? That’s up for debate. Here are some facts and opinions on the deal:

Factbox: Continental, United plane orders worth $22 billionReuters

Factbox: The new United AirlinesReuters

Timeline: United/Continental would create largest airlineReuters

Continental Name Change: So Long, Proud BirdWSJ

Then There Were ThreeThe Huffington Post
“Will it help the industry overcome a trail of losses dating back to the Reagan era? I doubt it. Why? Because airline deregulation was based on a flawed premise, and mergers don’t change conditions enough to remove the fallacy.”

What Sealed Continental-United Deal? JealousyWSJ

The Ups and Downs of United-Continental for TravelersWSJ
“What’s really in the United-Continental merger for travelers? Potential short-term pain, and potential long-term gain.”

Continental-United’s Jerry Maguire Moment - WSJ
“At times the call sounded like a love scene straight out of Jerry Maguire: ‘Our networks complete each other,’ said United CEO Glenn Tilton.”

Latest Airline Marriage Probably Won’t Be The Last - Forbes
“With industry costs rising, the deal between Continental and United probably won’t be the end of consolidation in the skies.”

DealZone Daily

British insurer Prudential is to list in Hong Kong on May 11 and announced a secondary listing in Singapore to fund its $35.5 billion takeover of rival AIA, AIG’s Asian life insurance business.  Prudential said it would publish prospectuses for each of the listings on May 5.

U.S. air carriers United Airlines and Continental are considering a nil premium all stock merger to create the world’s largest airline valued at about $6.6 billion.  US Airways earlier dropped out of merger discussions with United. Many believed United had only entered talks with US Airways to draw out Continental, arguably a better match for it.

CenturyTel is to buy Qwest Communications in another stock deal, valuing the combination of the U.S.’s third and fourth largest landline telephone companies at $10.6 billion. The deal is designed to let the new business, CenturyLink, cut costs and compete more effectively, as consumers increasingly unplug their phone lines and go mobile.

DealZone Daily

United Airlines has restarted merger talks with Continental Airlines as it eyes the top spot as the world’s largest air carrier. The two laid much of the ground work for a deal in 2008 but decided to puruse an alliance instead. A deal could leave US Air jilted despite four months of negotiations with United but, in a further twist to the aerial saga, United has also raised the topic of a deeper three-way cooperation between the airlines.

Top Macarthur Coal shareholder CITIC Resources said it has not yet decided whether to support a A$16 a share offer from Peabody Energy valuing the Australian miner at $3.8 billion. The 22.4 percent stakeholder said it needs more information to make a final decision on the Peabody bid.

Prudential’s Asia CEO said the British insurer is under no pressure from its shareholders to cut the $35.5 billion purchase price for AIG’s Asian life insurance unit.

The afternoon deal: Plane and simple?

A passenger aircraft is silhouetted against the setting sun in New Delhi October 12, 2008. REUTERS/B Mathur Their shares are up, so the market is saying a merger between United Airlines and US Airways would be a good thing, right? A tie-up could run into strong headwinds from unhappy pilots and tougher antitrust enforcement, industry experts told Reuters. The feeling on the Web is that a deal is inevitable… but it’s a painful road to be on.

From the Web:

Why the United- US Airways connection might not fly (Time)
“…you can’t fault the logic of a merger that would increase fares, since these guys really need the money. Wait a minute, watch me.”

United Is in Merger Talks With US Airways (NYT)
“But mergers in the airline industry have been difficult to pull off, in part because complex labor contracts can offset the promised cost savings.”

DealZone Daily

British Airways (BAY.L) and Spanish carrier Iberia (IBLA.MC) sign their merger agreement, sealing a long-awaited deal to create the world’s third largest airline by revenue. The deal creates a group with a combined market value of around $8 billion. Read the Reuters story here.

India’s Essar plans a $2.5 billion listing in the United Kingdom. The energy company expects to be included in the FTSE and has hired JPMorgan and Deutsche Bank to help it sell its shares.

UAL Corp’s United Airlines is in merger talks with US Airways in a deal that could create the second-largest carrier in the United States, two sources tell Reuters. Read the story here.

from Shop Talk:

Check Out Line: Duke wins, but there’s another bracket to fill

duke1Check out a different kind of tournament bracket still underway.

The Duke Blue Devils may have won yet another college basketball title Monday night, but consumers can still make their "Sweet 16" picks in Consumerist.com's annual "Worst Company in America"  tournament, which runs through April 26.

In its fifth year, the website, owned by Consumers Union, the publisher of Consumer Reports, lets consumers vote for their least favorite companies in matchups much like the NCAA tournament. Starting with 32 "teams," the tournament pairs companies in votes in which the "winner" (think about it, in a worst company vote you want to lose) advances to face the next competitor.

In the first round this year, Bank of America beat Citibank, GM beat Toyota and in an "upset" Cash4Gold beat defending "champion" AIG. Other companies that advanced included Walmart, Ticketmaster, United Airlines, Best Buy, Apple and Comcast, which has lost in the title game the last two years.

Showing Frontier the LUV

Known around the country as the no-frills airline, and among industry watchers as a most astute hedger of jet-fuel costs, Southwest Airlines showed it is willing to spend plenty to pick up bankrupt Frontier Airlines. Southwest appears to be spoiling for a fight with far bigger rival United Airlines on United’s — and Frontier’s — home turf in Denver.Southwest (owner of the heart-warming stock ticker LUV) boosted its offer for Frontier by about 50 percent to more than $170 million on Monday, far above a competing bid of $108.75 million from Republic Airways. Southwest says it is offering unsecured creditors 12 cents on the dollar, compared with Republic’s 8.7 cents. Frontier is set to hit the auction block on Thursday.Southwest said it wants to keep the bulk of existing Lynx Aviation, a Frontier subsidiary that serves 15 regional markets around Denver, but would transition to Boeing 737s and retire Frontier planes over a period of 24 months. These are the kinds of questions Southwest will need to answer to convince analysts that they know what they are doing with this deal. As Deepa Seetharaman reported in a July 31 analysis, integration issues are expected to cause some turbulence.If nothing else, raising the bid shows Southwest’s frugality has its limits.