Southwest Airlines moved a step closer to entering the Atlanta market Wednesday as AirTran Airways said shareholders approved the pending sale of the company to the Dallas-based discounter.
Federal antitrust clearance now is the only remaining hurdle before the $1.4 billion buyout closes.
Following a shareholder meeting in Orlando, AirTran announced that more than 98.6 percent of votes cast and 77.5 percent of outstanding shares were in favor of the deal. A total of 13 shareholders attended the meeting, which lasted five minutes, according to AirTran spokesman Christopher White.
AirTran chief executive Bob Fornaro, in a written statement, said stockholders recognized the value of bringing together AirTran and Southwest for "increased profitability and sustainable long-term value."
AirTran's board of directors had unanimously recommended approval. The deal is not subject to approval by Southwest shareholders.
The buyout gives AirTran shareholders $3.75 in cash and 0.321 shares of Southwest common stock, and values AirTran stock at $7.25 to $7.75, depending on the Southwest stock price, a substantial premium over AirTran's price when the deal was struck last September. Former AirTran shareholders will own about 6 percent of Southwest after the deal, according to the companies.
Southwest's entry into Atlanta, where AirTran has its main hub, means a bigger primary competitor for Delta Air Lines. It also furthers consolidation in the airline industry, which has seen mergers between Delta and Northwest; United and Continental; and US Airways and America West in recent years.
Pending federal clearance, Southwest and AirTran plan to close the deal in the second quarter, then combine operations over time.
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