For months, AirTran has been attempting to purchase Midwest Airlines, meeting constant objections on the part of the Midwest board and its chairman and CEO, Tim Hoeksema. For its part, AirTran continued with its pursuit of Midwest because “a merger made strategic and operational sense,” according to AirTran’s chairman and CEO, Joe Leonard.
For its part, the purchaser TPG (Texas Pacific Group) is global private investment firm with over $30 billion of capital under management. Northwest Airlines already has a code sharing arrangement with Midwest Air, and calls itself a “passive investor” in the final $450 million all-cash deal.
For the time being, Northwest has said it will have no decision-making authority in the management of Midwest, although part of its deal with TPG would allow it to acquire the investments firm's interest if certain unpublicized conditions are met. Reports are that TPG might eventually sell the airline to Northwest or list it once again on the stock market.
For Northwest, the purchase helps preserve its market dominance in the upper Midwest while preventing AirTran from increasing its presence in the area, and particularly in Milwaukee.
AirTran has headquarters in Orlando and operates a hub in Atlanta. While disappointed it says it is not interested in not looking for another airline with which to merge. Rather it will continue to add new markets and planes. “AirTran doesn’t need to merge with any other carrier to achieve our business goals,” says CEO Leonard.
Subject to shareholder and regulatory approval the deal is expected to close in the fourth quarter of the year.