Shareholders give assent to Delta-Northwest deal

Delta Air Lines Inc. and Northwest Airlines Corp. shareholders gave the go-ahead Thursday to a combination that would create the world’s biggest carrier, deciding that in their volatile industry they liked their chances better together than on their own.

The stock-swap deal announced April 14 still requires Justice Department approval. One other potential hurdle is a federal lawsuit seeking to block the deal that is set for trial Nov. 5 in San Francisco.

Delta Chief Executive Richard Anderson, who will keep his position after the companies combine, would not discuss the lawsuit, but he said the carrier maintains its goal of completing the deal by the end of the year.

“We are still focused on that timeline and believe we can accomplish the timeline as stated,” Anderson said after the Delta shareholder vote.

At a Delta meeting in suburban Atlanta, 99% of shares voted were in favor of issuing new stock as part of the transaction. Earlier, at a meeting in New York, 98% of Northwest shares voted in favor of Delta acquiring Northwest.

The deal was not trumpeted by everyone, however. A few retired Delta pilots complained that current employees would get equity when the deal was completed, but retired pilots wouldn’t. They suggested that Delta consider reinstating the defined benefit pension plan for pilots that the airline terminated while the carrier was under bankruptcy protection.

Anderson said he understood the retired pilots’ concerns, but he was firm that the pension termination was final.

“I think we’ve been clear we’re not going to reopen that issue,” Anderson said.

Northwest shareholders will get 1.25 shares of Delta stock for each share they own if the deal is completed. That values Northwest at roughly $2.8 billion, based on Delta’s current stock price and the 277 million Northwest shares outstanding or still to be issued as part of its bankruptcy reorganization plan. That’s about $800 million less than when the deal was announced.

The combined airline would be called Delta and keep its Atlanta headquarters. Northwest would become a wholly owned subsidiary of Delta during the integration process. Delta hopes to obtain a single Federal Aviation Administration operating certificate in 15 to 18 months.

Delta Chairman Daniel Carp would become chairman of the new board of directors, and Northwest Chairman Roy Bostock would become vice chairman. The new board would have 13 members -- seven from Delta’s board, five from Northwest’s board, including Northwest CEO Doug Steenland, and one from the Air Line Pilots Assn. A current Delta pilot would take the pilots’ seat on the board.