By Soyoung Kim
NEW YORK (Reuters) - The boards of AMR Corp
The all-stock merger, which is set to be announced early on Thursday, would finalize the consolidation of legacy U.S. air carriers that helped put the industry on a more solid financial footing.
AMR's bankruptcy creditors will own 72 percent of the combined airline, which will do business under the American Airlines brand and be based in Fort Worth, Texas, the people said. US Airways shareholders will own the rest.
The board approval came after AMR's unsecured creditors committee, which includes all three of AMR's major unions, met earlier on Wednesday to approve a proposed merger agreement, the people said.
The merged company will have a board of 12 members: four from US Airways including its chief executive Doug Parker, three from AMR including chief executive Tom Horton and five to be designated by the AMR creditors, two of the people said.
That will shrink to 11 members in 2014 after Horton steps down following the combined company's first annual meeting, the person added. Parker becomes chief executive of the new airline.
AMR's unsecured creditors are expected to be made whole on their claims in the form of stock in the merged company and also get accrued interest, the people said. AMR's shareholders will get a small equity stake as well, they added.
All the sources asked not to be named because the matter was not public. US Airways declined to comment while AMR representatives could not be immediately reached for comment.
The deal comes more than 14 months after the bankrupt parent of American Airlines filed for bankruptcy in November 2011, and would mark the last combination of legacy U.S. carriers, following the Delta-Northwest and United-Continental mergers.
A tie-up with US Airways would create the world's top airline by passenger traffic and help American and US Air better compete with United Continental Holdings
Some $11 billion valuation of the combined American-US Airways compares to the roughly $12.4 billion market capitalization for Delta, and $8.7 billion for United Continental.
(Additional reporting by Karen Jacobs, Writing by Ben Berkowitz; Editing by Bernard Orr and Andrew Hay)