We referred to gates
and slots at SFO, LAX,
and JFK as "expensive
Knowledgeable G Experienced G Efficient
How did that impact the negotiations?
KL: Yes, Virgin America very cleverly
set up a bidding war between Alaska
and JetBlue. Both carriers had good
reasons for their interest in Virgin
America. Alaska believed it needed
to cement its presence on the West
Coast and gain access to Virgin
America’s portfolio of gates and slots
at SFO, LAX, JFK, and elsewhere
(which we referred to as “expensive
NWLawyer: Besides the bigger pres-
ence in California, what other benefits
did the transaction provide to Alaska?
KL: The merger gave us additional
assurance that we can remain independent. Given the consolidation that’s
already happened in the airline industry, our larger national footprint, and
low-fare business model, U.S. competition regulators are probably less likely
to allow Alaska to be acquired by a
much larger airline.
NWLawyer: How did the process of
getting to a final deal actually work?
KL: Virgin America informed us that
we were in competition with another
bidder and told us that they’d consider
bids from each one at the end of a
six-week due diligence review period. Virgin America simultaneously
negotiated merger agreement terms
with each bidder. After a few rounds of
bidding, Alaska agreed to buy Virgin
America for $57 per share. We publicly
announced the deal a few days later
after carefully crafting a communications strategy for investors, employees,
and the public.
NWLawyer: What was the most significant legal challenge facing the merger?
KL: The biggest challenge, I would say
and my colleagues might disagree with
me, was the antitrust approval process
under Hart-Scott-Rodino [Antitrust
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