Southwest Airlines Acquires AirTran

AirTran Holdings AAI, announced earlier today that it has entered into a definitive merger agreement to be acquired by Southwest Airlines LUV in a transaction currently valued at more than $1.37 billion. Including existing AirTran Holdings indebtedness and capitalized aircraft operating leases, the aggregate transaction value is approximately $3.42 billion. Under the terms of the agreement, shareholders of AirTran Holdings will receive a combination of Southwest common stock and cash valued between $7.25 and $7.75, depending upon the average trading price of Southwest stock for a 20 trading day period to and including three trading days prior to the closing of the merger. At least $3.75 of the merger consideration will be in cash.