November 18, 2013
The merger between U.S. Airways (LCC) and AMR Corporation (AAMRQ) has finally been approved by the U.S. Department of Justice. The result is American Airlines Group, Inc. (AAL), which will be traded on the NASDAQ stock exchange. American Airlines Group will unseat United Continental as the world's largest airline.
Do you own shares of U.S. Airways or AMR Corp.? The existing stock will be cancelled and new shares will be issued according to the merger agreement. Recent airline mergers have proven very bumpy. Delta merged with Northwest in 2008 and United merged with Continental in 2010, in each case costs were much higher than expected.
Consider the following charts, detailing those previous mergers:
Delta Air Lines
United and Continental
Will the merger between U.S. Airways and AMR follow suit? Only time will tell; in both cases there was turbulence before reaching a comfortable altitude. The announcement of the new ticker symbolizes the passengers boarding the airplane as the company prepares to take flight from the NASDAQ runway.
--Charts taken from FreeStockCharts.com
Ethan Wade, Financial Advisor
(This article contains the current opinions of the author but not necessarily those of Brighton Securities Corp. The author's opinions are subject to change without notice. This blog post is for informational purposes only. Forecasts, estimates, and certain information contained herein should not be considered as investment advice or a recommendation of any particular security, strategy or investment product. References to specific securities and their issuers are for illustrative purposes only and are not intended and should not be interpreted as recommendations to purchase or sell such securities).