Atlantic Southeast Airlines is buying Houston-based ExpressJet Holdings in a deal that could bring more jobs to ASA's Atlanta headquarters.
Atlantic Southeast parent SkyWest Inc. announced the deal Wednesday, saying ASA will buy ExpressJet Holdings Inc. for about $6.75 per share -- a nearly 106 percent premium over the price at Tuesday's close.
Atlantic Southeast and SkyWest operate as Delta Connection for Atlanta-based Delta Air Lines and as United Express for United Airlines. ExpressJet operates as Continental Express for Continental Airlines.
The companies said they expect the deal to close in the fourth quarter.
The airlines will be based at Atlantic Southeast's offices near Hartsfield-Jackson International Airport. They'll continue to fly to Continental hubs in Houston, Newark, N.J., and Cleveland, and United hubs at Chicago O'Hare and Washington Dulles. ExpressJet would become an Atlantic Southeast subsidiary upon the close of the deal, but the two operations would eventually be completely combined.
Atlantic Southeast President Brad Holt said the deal should significantly expand his carrier's work force, though he did not have specifics.
"The impact on Atlantic Southeast people is going to be positive," said Holt, who will run the combined carrier.
Holt said he believes labor groups at both carriers are "fully on board to make this thing work the way we intended it." Both pilot groups are represented by the Air Line Pilots Association.
The deal's cash value is $133 million. The move comes as Continental and United move ahead with plans to combine in a $3 billion merger that will create the world's largest airline.
ExpressJet shares doubled on the news, to $6.57.
The announcement is the latest shakeup in the regional airline industry. Delta sold two of its regional carriers that operate as Delta Connection for $82.5 million last month. Also in July, American Airlines' parent AMR Corp. said it's considering whether to sell or spin off regional carrier American Eagle for the second time in three years. Big airlines are increasingly outsourcing their regional flights to cut costs.
SkyWest tried to buy ExpressJet for $3.50 per share in April 2008, but that price was rejected. ExpressJet, spun off from Continental in 2002, has been exploring options for its business ever since.
The Associated Press contributed to this article.
Atlantic Southeast Airlines
Owner: SkyWest Inc.
Headquarters: Atlanta
Fleet: 160 aircraft
Employees: about 3,700
Flies for: Mostly Delta, smaller operation for United
ExpressJet
Headquarters: Houston
Fleet: 244 aircraft
Employees: about 5,700
Flies for: Mostly Continental , with smaller operation for United
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