Alaska Air Group Inc is close to reaching a settlement with U.S. antitrust officials that will allow it to complete its proposed $2.6 billion acquisition of Virgin America Inc, according to a person familiar with the matter.
Virgin America’s shares rose as much as 5.9 percent to a record high of $58.70, before giving up some gains to be up 2 percent in afternoon trading on Friday. Alaska Air’s shares were little changed at $79.33.
“Alaska believes that (the) Department of Justice review will likely be completed by the end of November,” a spokeswoman for the airline said in a statement.
Bloomberg was first to report the news.
Discussions with the Justice Department, which has been considering the impact of the merger on competition and airfares, have included the possibility of Alaska jettisoning part of one or more code-sharing agreements it has with larger U.S. carriers, sources told Reuters last month. [nL1N1CN1S0]
Alaska Air agreed in April to buy California-based Virgin America to expand in Los Angeles and San Francisco and offer more connections to international airline partners. [nL3N1772GZ]
The deal would also help Alaska Air become the top carrier on the U.S. West Coast and compete more effectively with larger airlines.
Recent Articles on M&A
Source: Reuters.com
