UAL Reportedly to Acquire US Airways

UAL (UAL Quote) plans to buy the bulk of US Airways (U Quote), according to two reports.

The Wall Street Journal reported that UAL, United Airlines' parent, will pay $4.3 billion in cash and assume $7.3 billion in debt and leases. The deal, which is worth about $60 for each US Airways common share, is expected to be announced Wednesday. The Financial Times also reported the pending acquisition.

US Airways closed Tuesday at 26 5/16, up 1 1/16. UAL closed at 60 3/8, up 5/8.

UAL already is the world's largest airline, and US Airways is the nation's sixth largest. The Journal noted that the new airline would have 6,500 daily flights, while the world's second biggest airline, AMR (AMR Quote), parent company of American Airlines, and its affiliates have 3,600 daily flights.

But the newspaper also noted that the Justice Department could raise objections to the deal. It is suing Northwest (NWB Quote) and Continental (CAL Quote) over Northwest's purchase of just 14% of Continental, the Journal said.

The airlines will argue that there's little overlap, the Journal said. In addition, UAL will spin off most of US Airways' operations at Reagan National Airport in Washington.