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Was a Continental-United Merger Already in the Cards?

We discuss the timeline of events surrounding a United-Continental merger.

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There has been much talk recently in the news about a potential merger involving  United Airlines (UAUA) and  Continental (CAL). Although the talks have intensified recently, we believe both companies have already made numerous announcements that, taken collectively, appear to foreshadow a merger. In this piece, we will analyze and discuss the timeline of these events, describe why the carriers are compatible partners, and explain how a merger could positively affect the entire airline industry.

Timeline of Events
May 2008.--Shortly after Northwest and  Delta (DAL) announced their merger, Continental and United briefly held negotiations involving a possible merger. Although a golden share (which served as a deterrent to a change of control) held by rival Northwest was partially responsible for the deal's collapse, we also suspect that Continental was terrified of United's fragile financial position and quickly ended all discussions.

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Basili Alukos does not own shares in any of the securities mentioned above. Find out about Morningstar’s editorial policies.