NEW YORK (CNNMoney.com) -- UAL Corp.'s United Airlines announced a deal to merge with Continental Airlines on Monday, in a move that would create the world's largest airline, with estimated sales of $29 billion a year.
The combined company, which will fly under the United moniker and Continental logo, is now larger than Delta Air Lines (DAL, Fortune 500), which became the country's largest airline when it merged with Northwest Airlines in 2008.
The combined companies will serve more than 144 million passengers per year and fly to 370 destinations in 59 countries, the companies said in a statement.
"This combination will provide a strong platform for sustainable, long-term value for shareholders, opportunities for employees, and more and better scheduled service and destinations for customers," said Glenn Tilton, chairman, chief executive of UAL Corp., in a statement.
Under the terms of the deal, Continental shareholders will receive 1.05 shares of United common stock for each Continental common share they own, the companies said in a statement.
United shareholders would own approximately 55% of the combined company and Continental shareholders would own approximately 45%.
As a result of the merger, the companies expect to save between $1 billion and $1.2 billion over the next three years.
United and Continental discussed combining in 2008 and Houston-based Continental backed out. United boasts a stronger financial position this time around though.
Last week, the Chicago-based company reported a first-quarter loss of $82 million, much narrower than the $382 million loss posted a year earlier. And revenue jumped 15% to $4.2 billion.
Thanks to an improved financial performance, United was expected to have more weight in the talks. Last weekend, the company pushed to base the deal on the closing price of its shares the day before an agreement is signed.
Assuming the deal clears anti-trust hurdles, the combined airline would be based in Chicago and use the United name but would be run by Continental chief executive Jeff Smisek, the source said.
Elizabeth Warren and Bernie Sanders fired off a letter to KPMG and called the accounting firm out for failing to discover the widespread illegal behavior at Wells Fargo. More
Alex Simon believes Chipotle fired him for speaking up about the company's 'shady practices.' He's trying to join a lawsuit with 10,000 other workers suing the company for cheating them out of wages. More
A U.K. court has ruled that Uber drivers are entitled to benefits enjoyed by workers. More
In 1998, Ntsiki Biyela won a scholarship to study wine making. Now she's about to launch her own brand. More
You can contribute as much as $18,000 to your 401(k) in 2017, and as much as $5,500 to your IRA or Roth IRA. These limits are unchanged compared to last year. More