Northwest, Delta reported to be near deal
Delta Air Lines and Northwest Airlines are inching closer to a merger that would create the nation’s largest carrier, and if a deal is reached it could be announced next week, a person briefed on the discussions told the Associated Press on Wednesday.
Delta’s board of directors is expected to meet over the next several days, the source said without elaborating on the topic of the meeting.
The source, who was not authorized to talk as the negotiations entered a sensitive stage and asked not to be named, said one point of contention has been Northwest Chief Executive Doug Steenland’s potential role at the combined company.
Delta has a growing presence across the Atlantic and a strong hub in Atlanta, home to the world’s busiest airport. Northwest has strong routes across the Pacific and its main hub is in Minneapolis.
It wasn’t clear if other issues – such as the combined company’s name, its headquarters location and labor issues – had been resolved, but most management structure issues had, the source said.
Struggling consumer-electronics retailer Circuit City Stores Inc. said Wednesday it has increased its credit line by $800 million and extended the expiration date to 2013, according to a regulatory filing.
In a filing with the Securities and Exchange Commission, the Richmond-based company said it has increased its available borrowings up to $1.3 billion from $500 million and extended the expiration date to Jan. 31, 2013, from June 27, 2009.
“We have a difficult economy, we have fierce competition and we’re in the middle of some of the most difficult, deepest work in the transformation work,” Chief Executive Philip J. Schoonover said in an interview with the Associated Press.
Schoonover said the credit line gives Circuit City liquidity and access to the capital markets to continue the turnaround “even if the economy doesn’t support us or if competition gets tougher for a period.”
Cisco Systems Inc.‘s second-quarter profit matched Wall Street’s subdued expectations, but shares of the world’s largest Internet networking supplier plunged on signs of a sales growth slowdown.
The San Jose-based company’s guidance of 10 percent sales growth in the third fiscal quarter fell below the 15 percent projection by Wall Street analysts.
Cisco shares sank on the gloomy outlook, falling $1.77, or nearly 8 percent, to $21.31 in after-hours trading.