Economics Diamond Foods Acquires Kettle Essay

S. across a diversified offering of three complementary brands (Emerald®, Pop Secret® and Kettle). San Francisco-based Diamond shed 53 cents, or 1.35%, to close at $38.71. The stock has gained 8.9% this year.

United Airlines parent UAL Corp acquires Continental Airlines

Both of these corporations are airlines with well-developed domestic and international components. The airline industry has been hammered in the past two years by volatile fuel prices, low-cost competition and overcapacity. The acquisition will likely help United Airlines it attract more business travelers because the merged company will fly to more international and domestic donations while cutting costs and reducing competition. A JP Morgan Chase & Co analysis estimated the combined company will be able to lop off 8% of their capacity and cut expenses by 5%.

In this stock swap deal, Continental shareholders will receive 1.05 shares of United common stock for each Continental common share they own. Based on United's $21.60 closing price on Friday June 11, 2010, and Continental's 139.6 million outstanding shares as of April 21, 2010 United will pay $22.68 a share.

Such a rate is a 1.5% premium over Continental's current share price. The merged company will have 314.5 million shares and UAL shareholders will own roughly 55%

The anticipated $3.17 billion deal has already raised stock for both corporations by approximately 2.3%

. The deal is expected to produce between $1 billion to $1.2 billion in annual revenue and cost benefits by 2013.

http://www.kettlefoods.com/site/files/DMND%20Press%20Release.pdf

McMahon, T.J. (2010) United Continental merger is a disgrace. The Denver Post. Retrieved from http://www.denverpost.com/recommended/ci_15269916.

Wall Street Journal Online. Retrieved from http://online.wsj.com/public/resources/documents/stocksdaily.htm.

Mouawad, J. (2010). In United-Continental Deal, Birth of a Behemoth. New York Times. Retrieved from http://www.nytimes.com/2010/05/04/business/04air.html.

Mouawad, J. (2010). In United-Continental Deal, Birth of a Behemoth. New York Times. Retrieved from http://www.nytimes.com/2010/05/04/business/04air.html.