US Airways Offers $8 Billion for Delta

US Airways Group Inc. is offering to buy bankrupt Delta Air Lines Inc. for about $8 billion in cash and stock.

Under terms of the Arizona carrier’s proposal, disclosed late Tuesday, Delta creditors would get $4 billion in cash and 78.5 million shares of US Airways stock with an aggregate value of about $4 billion, based on the closing price of US Airways’ stock as of Tuesday. US Airways says its offer marks a 25-percent premium over Delta’s current share price.

US Airways, which has lined up $7.2 billion in financing through Citigroup, sees opportunities to cut costs by $1.65 billion — but only if the deal moves ahead soon.

Significantly, the opportunity to generate more than half of these synergies could be lost if a merger is delayed until after Delta emerges from bankruptcy, said US Airways Chief Executive Officer Doug Parker.

Parker’s overture to Delta creditors and shareholders comes after an earlier appeal to Delta management was rebuffed.

PAR Capital Management, US Airways’ largest shareholder, supports the bid.

The merged entity would be the No. 1 airline across the Atlantic and No. 2 to the Caribbean. It would reach more than 350 destinations in North and South America, Europe, Asia and Africa.