Alaska Air Agrees to Settle Consumer Lawsuit Opposing Merger

Alaska Air Group Inc. Wednesday said it agreed to settle a lawsuit filed by private plaintiffs that opposed its merger with Virgin America Inc. on antitrust grounds, removing the last big obstacle in the way of its planned deal.

The suit was filed in September in U.S. District Court in San Francisco on behalf of 42 fliers and travel agents. The judge had set a trial date for Dec. 12 but ordered a mandatory settlement conference and pretrial hearing on Wednesday.

Terms of the settlement weren't disclosed. Alaska Air said it looks forward to closing the transaction "in the very near future."

On Tuesday, the Justice Department approved Seattle-based Alaska Air's $2.6 billion acquisition of Virgin America, but imposed conditions that required the acquirer to scale back the scope of a route partnership it holds with American Airlines Group Inc. Justice Department officials Tuesday said whether the trial would proceed was "up to the judge in San Francisco."

Alaska Air has raised $1.5 billion in financing for the acquisition of San Francisco-based Virgin American, and already has booked $36 million in one-time merger expenses as it worked since the deal was announced in April to prepare for it and attain Justice Department approval.

The consumer lawsuit was led by Joseph Alioto, a San Francisco antitrust lawyer who has filed similar complaints on behalf of individual plaintiffs in other big airline mergers in recent years.

Write to Susan Carey at [e-mail]

(END) Dow Jones Newswires

December 07, 2016 17:25 ET (22:25 GMT)

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