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Airline Consolidation Will Propel Moderate M&A Activity For U.S. Aerospace & Defense Jan 07
Standard & Poors, Jan 2007
Abstract
Significant private-equity interest in U.S. airlines and the Aerospace & Defense industry likely will drive at least a moderate level of mergers and acquisitions this year, with the airline sector potentially the focus of the major M&A activity. US Airways Group Inc.'s (B-/Watch Dev/--) raised bid for bankrupt Delta Air Lines Inc. (rated 'D') to $5 billion of cash and stock valued at $5.2 billion (a 19% increase over the previous proposal) may prompt competing bids from other airlines, if it appears that Delta's unsecured creditors (whose approval is needed to emerge from Chapter 11) are receptive. Possible suitors include United Air Lines Inc. parent UAL Corp. (B/Stable/--) and Northwest Airlines Corp. (rated 'D'), which, like Delta, is in Chapter...
Companies mentioned in this report are: AMR Corp.,American Airlines Inc.,Continental Airlines Inc.,Delta Air Lines Inc.,Raytheon Co.,United Air Lines Inc.,US Airways Inc.,US Airways Group Inc.,America West Holdings Corp.,United Continental Holdings Inc.,Northwest Airlines Corp.,America West Airlines Inc.,TransDigm Inc.
Standard and Poors RatingsXpress Credit Research provides in-depth coverage of international corporates, financial institutions, insurance companies, utilities, sovereigns and structured finance programs. RatingsXpress Credit Research lets users determine the credit rating of holdings and identify key factors underlying an issuer's creditworthiness, distinguishes the different risk exposures for new and existing deals, and provides an understanding of how their analysts interpret key regulatory, political and environmental events and their economic impact.
Research Type: Commentary
Criteria articles describe the thought process and methodology Standard & Poor's analysts use in determining ratings. These commentary pieces discuss both the quantitative (economic and financial) and qualitative (business analysis and caliber of management) aspects of the analysis, as well as legal issues.
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