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News > Deals
ValuJet, AirTran merging
July 10, 1997: 4:35 p.m. ET

ValuJet linking with small regional carrier AirTran in $62M stock swap
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NEW YORK (CNNfn) - ValuJet, Inc., parent of troubled ValuJet Airlines, said Thursday it has agreed to merge with Orlando-based AirWays Corp., parent of AirTran Airways.
     Under the agreement, they will merge their two holding companies into a newly created holding company, to be known as AirTran Holdings, Inc.
     After the merger becomes final, Atlanta-based ValuJet Airlines will operate under the name AirTran Airlines. AirTran Airways will continue to operate under its original name.
     Company spokesman Gregg Kenyon said no decision has been made on whether the company's logo, known as Critter, will remain once ValuJet becomes AirTran.
     The deal will be accomplished through a one-for-one stock swap. ValuJet will issue about 9 million shares in the transaction, worth approximately $61.8 million based on ValuJet's (VJET) Wednesday closing stock price of 6-13/16.
     The companies said they expect the tax-free deal to be completed in about three to four months, assuming shareholder and other regulatory approvals are received.
     ValuJet has been struggling to return to its glory days since the May 1996 crash of one of its McDonnell-Douglas DC-9 jets in the Florida Everglades. All 110 passengers and crew were killed, and the Federal Aviation Administration grounded the carrier's fleet soon afterward.
     After an extensive review, ValuJet was allowed to resume flying, but was required to reduce the number of jets it in its fleet. The airline now serves 24 cities.
     AirTran Airways flies out of Orlando to 23 cities using a fleet of 10 Boeing 737 aircraft while ValuJet flies to 24 cities with a fleet of 30 DC-9s.
     The companies said they plan to blend ValuJet's large-market service with AirTran's smaller-city service. ValuJet also said it hopes to benefit from access to AirTran's maintenance facility in Orlando.Back to top
-- Randy Schultz and Cyrus Afzali

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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.