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EXHIBIT 99.1
Continental Airlines contact: Northwest Airlines contact:
Corporate Communications Corporate Communications
713-324-5080 612-727-4284
CONTINENTAL, NORTHWEST REACH DEFINITIVE AGREEMENT
ON STOCK REPURCHASE
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HOUSTON and MINNEAPOLIS/ST. PAUL, Nov. 16, 2000 -- Continental Airlines
(NYSE: CAL and CAL.A) and Northwest Airlines (NASDAQ: NWAC) today announced that
the two airlines have executed definitive agreements regarding the sale to
Continental of its common stock held by Northwest Airlines, and an extension of
their alliance agreement through 2025. The boards of both airlines approved the
agreements prior to their execution.
In connection with the transaction, Continental will repurchase from
Northwest approximately 6.7 million Continental Class A shares for $450 million
in cash. Under the terms of the agreements, the repurchase of a portion of
Northwest's interest in Continental will occur immediately prior to a
recapitalization of Continental, whereby each remaining outstanding share of
Continental Class A common stock will be reclassified into 1.32 shares of
Continental Class B common stock. After the recapitalization, Northwest will
retain approximately 2.6 million shares of Continental Class B common stock,
which is expected to constitute less than 5% of Continental's then outstanding
common stock.
The agreements signed today also amend the alliance agreement between
Continental and Northwest to extend its term through 2025, and to provide for
termination rights upon certain change of control and other transactions
involving the carriers and third party major air carriers.
-more-
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DEFINITIVE AGREEMENT/PAGE 2
Continental also has agreed to issue to Northwest a special series of
preferred stock. That preferred stock will give Northwest the right to block
certain business combinations and similar change of control transactions
involving Continental and a third party major air carrier during the term of the
alliance agreement, but is subject to redemption by Continental upon certain
events, including upon a change of control of Northwest involving a third party
major air carrier.
The parties anticipate that the transactions contemplated by their
agreements will close in approximately two months, after a special stockholders
meeting of Continental is held. The parties plan to ask U.S Federal District
Court Judge Denise Page Hood today to adjourn the current litigation by the
United States against Northwest and Continental pending closing of the
transactions, and then to dismiss that litigation without prejudice upon closing
of the transactions.
"We are delighted to have reached final agreement with Northwest on
these issues," said Continental Chairman and Chief Executive Officer Gordon
Bethune. "We will continue to build and strengthen our alliance with Northwest
in order to compete more effectively with the major networks of our larger
competitors."
"This agreement serves our two objectives to build a successful
alliance with Continental and to insure our partner's long-term independence,"
said John Dasburg, Northwest president and CEO. "We believe our customers will
benefit from a fourth strong U.S. airline network that provides superior
customer service and a network that takes them where they want to go."
SAFE HARBOR
Statements in this news release which are not purely historical facts, including
statements regarding our beliefs, expectations, intentions or strategies for the
future, may be "forward-looking statements" under the Private Securities
Litigation Reform Act of 1995. All forward-looking statements involve a number
of risks and uncertainties that could cause actual results to differ materially
from the plans, intentions and expectations reflected in or suggested by the
forward-looking statements. Information with respect to the factors and events
that could cause these differences is contained in the Companies' respective
Securities and Exchange Commission filings, including the Companies' respective
Annual Reports on Form 10-K for the year ended December 31, 1999. We undertake
no obligation to update any forward-looking statements to reflect events or
circumstances that may arise after the date of this release.
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