Delta Acquires 49% Stake in Virgin Atlantic

The acquisition is subject to regulatory approvals in both the U.S. and the European Union, and is expected to be completed by the end of 2013. Delta will file a request with the U.S. Department of Transportation for immunity from antitrust rules, which would allow the partners to coordinate schedules and operations more closely.

Virgin Atlantic president Sir Richard Branson said:

I truly look forward to the possibilities our partnership with Delta will offer. We have always been known for our innovation and service and have punched above our weight for 28 years. That is why our customers love us so much. We will retain that independent spirit but move forward in a strengthened partnership with Delta.

The acquisition represents a serious discount to the $962 million that Singapore Airlines paid for the stake in 1999. However it never fully developed the partnership with Virgin, as Delta has now promised to do.

Shares of Delta are up nearly 4% on the announcement, at $10.52 in a 52-week range of $7.83 to $12.25.

Paul Ausick