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Authors
Advisor(s)
Abstract(s)
The US airline industry is characterized to be an industry with a high competition
mainly in the domestic segment. In order to face this competition several airlines entered
in mergers and acquisitions (M&A) deals as way to consolidate its position in the market.
This trend was accentuated with the global recession that brought several challenges to
this industry. For this reason, the merger between United and Continental Airlines, two
major US carriers, are being planned and its valuation and analysis are the focus of the
present dissertation. By taking in account the current conditions of both airlines are
estimated potential synergies of around 37,4% of the merged airline’ equity value without
synergies which represent 69% of the current Continental’s market capitalization, the
airline seen as the target. Given this, it is suggested an offer with a premium of 21,6%
over the current Continental’s market capitalization which will constitute a deal of $3,018
million, which is here suggested to be paid all in stock.