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DOT approves private equity buy of Atlas Air, company says

Deal to close by end of week as regulators rule out anti-competitive effects

The final 747-8 freighter ever produced by Boeing rolls out of the hangar in Everett, Washington, for delivery to Atlas Air on Jan. 31. (Photo: Atlas Air/Paul Weatherman)

Publicly traded cargo airline Atlas Air said Tuesday the Department of Transportation has signed off on its sale to private investors and that it expects to finalize the deal Friday.

A private equity consortium led by Apollo Global Management (NYSE: APO) agreed in early August to buy Atlas Air Worldwide Holdings (NASDAQ: AAWW) for $5.2 billion, including $2.2 billion in debt. Apollo’s partners are J.F. Lehman & Co. and Hill City Capital. Analysts expected the sale would be finalized early this year.

“As of March 14, 2023, all regulatory conditions to closing set forth in the merger agreement were satisfied. Subject to the satisfaction or waiver of the remaining closing conditions, the company expects to consummate the merger on or about March 17,” Atlas said in a Securities and Exchange Commission filing. 

The world’s largest operator of Boeing 747 freighters said in its fourth-quarter earnings last month that it has received all shareholder and regulatory approvals save from the DOT. Atlas Air, which also offers passenger charters, has a diverse customer base that includes Amazon, DHL Express, Alibaba’s logistics arm Cainiao, and the U.S. Department of Defense.

Once the sale is consummated Atlas will be removed from the Nasdaq exchange and no longer be required to report its financial performance.

The airline’s stock increased 3.1% to $102.40 in aftermarket trading.

Speculation had increased in recent weeks that the DOT was taking a long time to approve the sale because of the Biden administration’s pro-consumer competition agenda and concerns over corporate consolidation. Transportation Secretary Pete Buttigieg said in a Bloomberg interview that the department is concerned about concentration in the airline, ocean and freight railroad industries and recently hired a legal expert from the Federal Trade Commission to lead its merger reviews. 

The Department of Justice last week filed suit to block JetBlue’s $3.8 billion takeover of Spirit Airlines on grounds it would drive up airfares and reduce choice.  And the DOT rejected JetBlue’s exemption request seeking to operate under single ownership while the undergoes regulatory review.

But the Atlas Air deal is different because it is a sale to private investors more than a merger of two rival cargo airlines.

However, on Thursday the Department of Justice said two Apollo Global-affiliated directors left the Sun Country Airlines (NASDAQ: SNCY) board due to antitrust concerns about interlocking directors associated with the Atlas Air acquisition. Sun Country is a passenger carrier to leisure destinations but also operates a dozen small cargo aircraft for Amazon Air (NASDAQ: AMZN).

The move came after U.S. Assistant Attorney General Jonathan Kanter last May said he would scrutinize private equity firms acquiring companies. Investor groups sometimes act in anti-competitive fashion, Kanter told the Financial Times.

Since October, directors resigned from the boards of nine companies in response to DOJ concerns about potential illegal interlocking company directors, 

Atlas Air recorded $287 million in fourth-quarter adjusted earnings before accounting measures, a 23.6% decline from the prior year, reflecting weak shipping demand that resulted in fewer flying hours and higher operating costs associated with weather disruptions.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.


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One Comment

  1. John Dickerson

    Not sure these mergers are good for the employees.
    I’ve worked with a few of atlas employees noticed they are bullish.
    Some are very demanding and have no business being in the position they are.Maybe Apollo will change a lot of this.

Comments are closed.

Eric Kulisch

Eric is the Supply Chain and Air Cargo Editor at FreightWaves. An award-winning business journalist with extensive experience covering the logistics sector, Eric spent nearly two years as the Washington, D.C., correspondent for Automotive News, where he focused on regulatory and policy issues surrounding autonomous vehicles, mobility, fuel economy and safety. He has won two regional Gold Medals and a Silver Medal from the American Society of Business Publication Editors for government and trade coverage, and news analysis. He was voted best for feature writing and commentary in the Trade/Newsletter category by the D.C. Chapter of the Society of Professional Journalists. He won Environmental Journalist of the Year from the Seahorse Freight Association in 2014 and was the group's 2013 Supply Chain Journalist of the Year. In December 2022, he was voted runner up for Air Cargo Journalist by the Seahorse Freight Association. As associate editor at American Shipper Magazine for more than a decade, he wrote about trade, freight transportation and supply chains. Eric is based in Portland, Oregon. He can be reached for comments and tips at [email protected]