FORT WORTH, Texas, Nov. 19 /PRNewswire/ -- In order to enhance its overall airline network and strengthen its presence in the Western United States, American Airlines, a subsidiary of AMR Corporation, said today it has signed a definitive merger agreement to acquire Reno Air for a total cash consideration of $124 million.
The merger agreement provides for a cash tender offer which would commence no later than Wednesday, Nov. 25, 1998 to acquire all of the outstanding common shares of Reno Air at $7.75 per share.
American, which has had a marketing partnership with Reno Air since 1993, said there is virtually no overlap on the routes served by the two carriers.
"Acquiring Reno will give our customers the benefits of a more comprehensive travel network throughout the U.S. and around the globe, " said Don Carty, chairman and CEO of AMR and American Airlines. "Reno's West Coast route system will enhance both the AA network and the networks of our oneworld partners."
"Our customers have told us they want the AA brand more accessible in the West, where we already have a strong east-west presence. This acquisition will offer more service options for our customers and those of our global airline partners, most notably those connecting to and from Cathay Pacific, Qantas and Canadian Airlines," said Carty.
Carty indicated that American was forced to withdraw from the West Coast in the early 1990s, eventually closing its San Jose, Calif., hub and entering into an AAdvantage frequent flyer partnership with Reno Air to maintain a West Coast presence.