UNITED TO BUY US AIRWAYS

UNITED TO BUY US AIRWAYS    UAL Corp., the parent of United Airlines, has agreed to purchase Virginia-based US Airways Group for $4.3 billion in cash, plus the assumption of $1.5 billion in debt and $5.8 billion in aircraft leases.
   The deal, which will face definite regulatory hurdles in the United States and Europe, could combine the world’s largest airline with the sixth-largest U.S. carrier. United has an extensive international route network, particularly in the transpacific market. US Airways brings deep regional route penetration in the eastern U.S. and a presence on the transatlantic.
   The complementary route networks make a good fit, according to analysts, and may be the two airlines’ best defense against arguments that the merger will hamper competition. United claims that its route network overlaps just 17 percent of US Airways’ routes. UAL said it will divest itself of some assets, particularly slots at Reagan National Airport in Washington D.C., to ease regulatory approval.
   The airlines expect to close the deal next year. Each share of US Airways stock will be tradable for $60 cash. Based on US Airways’ stock price on May 23, that represents a 130-percent premium.
   It is unclear what benefits shippers will gain form a United-US Airways combination. Some U.S. shippers, particularly in smaller U.S. East Coast markets, could realize faster connections to Asian destinations in United’s network.
   United and US Airways have not announced any specific cargo plans, though James E. Goodwin, chairman and chief executive officer of UAL Corp., included a brief reference to shippers in a statement announcing the deal.
   “For the passenger and cargo customers of United, this merger will fill a geographic void along the East Coast and offers new reach to the East and Southeast,” he said.