Delta and Northwest secure Justice Department approval for merger

Washington DC
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Roughly six months after unveiling their plans to merge, Delta Air Lines and Northwest Airlines have secured clearance for the deal from the US Department of Justice.

Executives from both airlines have repeatedly stated their expectations of gaining DOJ approval by yearend.

The department says it "has determined that the proposed merger between Delta and Northwest is likely to produce substantial and credible efficiencies that will benefit US consumers and is not likely to substantially lessen competition".

DOJ further explains the merger will produce cost savings in airport operations, information technology and fleet optimization.

Previously Delta and Northwest have estimated annual synergies of $2 billion, which should ramp up in 2012, and integration costs of $600 million over three years.

The two carriers still have to close the transaction, which also should occur before the end of the year. At that time Northwest shareholders will turn over their stock in exchange for Delta shares. The combined entity will operate under the Delta brand.

Recently Delta CEO Richard Anderson told employees the merger's importance is even more relevant given the current global economic uncertainty.

Anderson highlighted the new carrier's ability to expand its international network, allowing it to take market share away from other carriers.