Source: Bloomberg
Author: Mary Jane Credeur and Mary Schlangenstein

Directors at United Airlines parent UAL Corp. and Continental Airlines Inc. approved a stock merger of more than $3 billion that would create the world’s biggest carrier, people familiar with the matter said.

The companies plan to announce a deal tomorrow, said one person, who asked not to be identified because the terms aren’t public. Continental Chief Executive Officer Jeff Smisek, 55, will become the CEO of the combined airline, and United’s Glenn Tilton, 62, will become chairman, people have said.

United, the third-largest U.S. airline, and No. 4 Continental began talks last month on a combination, reviving negotiations that Houston-based Continental abandoned in April 2008.

Based on closing prices on April 30, UAL had the third- largest market value among U.S. carriers at $3.63 billion, followed by Continental at $3.12 billion.