If Delta and Northwest are going to complete their deal to create the world's largest airline, they'll first have unions to cajole, politicians to placate, and antitrust regulators to convince.
Two of Northwest's largest unions immediately declared their opposition.
Most importantly, the airlines will need antitrust approval from federal regulators. In 2001, an attempted merger of United Airlines and US Airways fell apart amid antitrust concerns. Executives at Delta and Northwest said they are aiming to close their deal by the end of this year, which would be before the end of the merger-friendly Bush administration.
The takeover announced Monday calls for the combined airline to be named Delta, remain based in Atlanta, and be run by Delta CEO Richard Anderson. If the share-swap becomes final, Delta shareholders will get a bigger company, while Northwest shareholders would get a 16.8 percent premium over Monday's closing stock prices. Based on those prices, the deal values Northwest at more than $3.6 billion.
Shares of both companies rose in premarket trading Tuesday. Northwest shares gained $1.17, or 10.2 percent, to $12.39 while Delta shares added 61 cents, or 5.8 percent, to $11.09.
As for the unions, the airlines tried something novel: They tried to get their pilots to agree on a joint contract and seniority beforehand. They failed to get an accord on seniority, though.
Delta made a deal with its pilots over the weekend, leaving the Northwest pilots to work out something later. On Monday, Northwest pilots declared their opposition to the combination "as it stands," perhaps leaving room for a deal later.
The Delta pilot agreement, which still needs rank-and-file ratification, extends its existing collective bargaining agreement through 2012 and gives Delta pilots 3.5 percent of the new company.