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United pursuing merger process ahead of Aug. 1 walk-away date

SHARE United pursuing merger process ahead of Aug. 1 walk-away date

CHICAGO — United Airlines' parent company said Thursday it would obey the terms of its recently revoked offer to buy US Airways and pursue the buyout until federal regulators make a final ruling.

The move complies with a request by US Airways, but several industry experts said it is most certainly a legal maneuver rather than a change of heart by United.

UAL Corp. moved earlier this month to call off the $4.3 billion acquisition amid daunting economic and regulatory challenges, but US Airways is balking at the proposed separation.

Nevertheless, UAL said Thursday it will comply with US Airways' request to formally seek a decision by the DOJ on the 14-month-old proposal.

"In keeping with its obligations under the merger agreement, UAL Corporation will continue to pursue the transaction during this period and stands ready to address additional questions DOJ and the state attorneys general might have," the Elk Grove Village, Ill.-based company said. Spokesmen declined further comment.

The move means the deal can't be scuttled until August, following a required 21-day review period by the Justice Department. Under the terms of the deal, United is entitled to walk away Aug. 1, paying a $50 million breakup fee.

United reportedly had asked US Airways to allow it to pay just $50 million while abandoning the deal before that date.

Legal expert Bert Foer, president of the American Antitrust Institute, said the two sides were just "scuffling over the terms of disengagement" and likely the breakup costs.

"I would not think this move is intended to generate completion of the merger," he said. "There are too many signs that it's over."