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This excerpt taken from the SKYW 8-K filed Sep 13, 2005. SKYWEST COMPLETES PURCHASE OF ATLANTIC SOUTHEAST AIRLINES
ST. GEORGE, UT,—(NASDAQ:SKYW) SkyWest, Inc., (“SkyWest”) announced today that it has completed the purchase of Atlantic Southeast Airlines, Inc.,(“ASA”) for a purchase price of $425 million. As a result of the transaction, ASA is now a wholly-owned subsidiary of SkyWest. Together with SkyWest Airlines, Inc., (“SkyWest Airlines”) SkyWest’s existing wholly-owned subsidiary, the two carriers will create the largest regional airline carrier network in the domestic United States. The purchase transaction also resulted in the amendment and extension of existing Delta Connection operating agreements under which SkyWest Airlines and ASA obtained the rights to continue flying as Delta Connection carriers through 2020.
“The acquisition of ASA enhances our strategic position and accomplishes several key corporate objectives,” said Bradford R. Rich, SkyWest Executive Vice President, Chief Financial Officer and Treasurer. “We are pleased that the deal has been consummated, but remain focused on the importance of serving our customers and providing a productive work environment for our employees” he continued.
SkyWest paid $350 million in cash at closing, consisting of $330 million of the purchase price and $20 million relating to certain aircraft financing deposits Delta had previously paid. An additional $125 million representing $95 million of the purchase price and $30 million relating to the return of certain aircraft financing deposits is payable to Delta, pursuant to the terms of an escrow agreement, upon the earlier of the assumption by Delta of the ASA and SkyWest Airlines Delta Connection Agreements should Delta file for reorganization under Chapter 11, or four years after closing of the transaction. SkyWest would be entitled to retain the escrow deposit if Delta files for reorganization under Chapter 11 and rejects its Delta Connection agreement with ASA or SkyWest Airlines prior to the fourth anniversary of the closing of this transaction.
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