No Serious Roadblocks in Northwest-Delta Merger: Expert Available

  • newswise-fullscreen No Serious Roadblocks in Northwest-Delta Merger: Expert Available

    Credit: Photo by Robert Barclay, CMU Public Relations and Marketing.

    Central Michigan University finance and law faculty member Ted Bolema.

Newswise — A merger with Delta Airlines would be Northwest Airlines' second this year, following the acquisition of Midwest Airlines at the end of January, and would form the largest airline in the U.S. Central Michigan University finance and law faculty member Ted Bolema says that with Northwest position of having the greatest share of routes in the Midwest and Delta's strengths in other parts of the county, it appears unlikely that a merger between the two would attract significant opposition and could probably proceed with few or no divestitures. Bolema is available for commentary on the issue.

A few more of Bolema's initial thoughts on the subject:

"Northwest's acquisition of Midwest was investigated by the Department of Justice but was cleared without a challenge. Although that merger involved a much smaller airline, the overlaps with Northwest were greater than the overlaps between Northwest and Delta."

"Due to the current political climate, the parties have an incentive to close the transaction before the end of the year. The current administration is on record as not challenging the recent acquisition of Midwest Airlines by Northwest, and appears to be generally less concerned about airline mergers than previous administrations. In contrast, in the previous administration in 2000 the Antitrust Division prevented Northwest from retaining a controlling interest in Continental Airlines, although the overlaps between Continental and Northwest were greater than the Northwest/Delta overlaps. "

"The next administration may take a different attitude toward airline mergers, and some opposition appears to be developing in Congress. Thus, Northwest and Delta may believe that they have a better chance of closing the merger without antitrust opposition in 2008 than they may face next year and beyond."

Bolema, an expert on business mergers and antitrust law, is a former trial attorney with the of the Department of Justice, where he was involved in handling airline antitrust matters as a part of the Transportation, Energy and Agriculture Section of the Antitrust Division. He teaches regulatory law, entrepreneurship law and legal environment of business. Bolema is a practicing attorney licensed in the State of Michigan and is the author of more than a dozen articles on antitrust law and the law of e-commerce. He was an attorney with Weil, Gotshal & Manges in New York City. He is also a former special assistant attorney general for the Eastern District of Virginia.

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