In American Airlines Merger, One CEO Had to Go
"He's a great numbers guy," said Thomas Roberts, a partner with Weil, Gotshal & Manges, the law firm that represented American.
In the summer, Horton alerted his board that it was time to investigate a merger.
He reached out to Parker and arranged a 6:15 a.m. breakfast on July 19 at the Jefferson Hotel in Washington. Both men had oatmeal. They spoke about sharing financial documents and Horton asked Parker to ratchet down the public push for a merger.
A deal and decision about who would run the new airline was still way off.Three days later, Horton started to spin the idea of a merger as his own. He told The Associated Press that the first conversation the two men had about a possible merger took place in September 2011, when Horton was just American's president. They were at an exclusive gathering of top airline executives in Wyoming known as "conquistadores del cielo," or the conquerors of the skies. During a barbeque lunch, Horton approached Parker, saying there could be value in a merger. "I made that pitch. We nodded heads to one another," Horton had said in July 2012. On Aug. 31, the airline announced that nondisclosure agreements had been signed and they were considering a merger. "It does not mean we are merging -- it simply means we have agreed to work together to discuss and analyze a potential merger," Parker told employees. For the next three months, teams of lawyers, accountants and consultants started reviewing each airline's books. There were so many people that eight separate conference rooms in Weil's Dallas office were required. US Airways executives came to Dallas to hammer out details between sips of Dr. Pepper and iced tea. "We wowed them with Mexican food and BBQ," said Glenn West, a partner with Weil who oversaw American's negotiations. By this point, American had secured new contracts from its unions, cut other costs and improved its revenue. After months of negotiations, US Airways presented the merger to the creditors on Jan. 10. It proposed giving 70% of the new airline to them and American's employees and the remaining 30% to US Airways shareholders. The creditors were sold. But Horton wasn't.
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