By Mary Schlangenstein
Nov. 15 (Bloomberg) -- US Airways Group Inc., formed by the merger of two carriers a year ago, proposed to take over Delta Air Lines Inc. in an $8 billion combination when Delta emerges from bankruptcy protection.
Delta's creditors would receive $4 billion in cash and 78.5 million shares of US Airways worth about $4 billion based on the stock's closing price yesterday, US Airways said in a statement today. The proposal comes 14 months after US Airways combined with America West Holdings Corp. to emerge from its own bankruptcy.
Delta, which sought bankruptcy protection in September 2005, has cut unprofitable flights, reduced labor costs and shed aircraft to prepare to exit court supervision next year. Delta Chief Executive Officer Gerald Grinstein didn't reply to a September 26 letter proposing the merger, US Airways said.
``We believe that the combination of US Airways and Delta, like the US Airways-America West merger we completed in September 2005, is extremely compelling and will create significant value for each of our stakeholders,'' US Airways Chief Executive Officer Doug Parker said. ``The combined company will be a more effective and profitable competitor in the current fragmented marketplace.''
The merged airline would operate under the Delta name and be one of the world's largest carriers, Tempe, Arizona-based US Airways said. US Airways said a merger would provide $1.65 billion in annual cost savings for the two companies.
To contact the reporter on this story: Brendan Walsh in New York at
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