Southwest Airlines Co.’s agreement to acquire AirTran Holdings Inc. will bring together companies whose retirement assets total $5.17 billion, all in defined contribution plans.
Southwest, Dallas, plans to acquire the holding company, which includes AirTran Airways Inc., Orlando, Fla., for $1.4 billion in a combination of cash and stock, pending approval of AirTran stockowners and regulators, according to a Southwest statement Monday.
Each company will keep its plans separate through 2011 as required under existing labor agreements, said Christopher White, spokesman for AirTran. Any merger of the plans wouldn’t take place until at least 2012, he added.
Executives from both companies will work on the integration and any combination of the plans once the acquisition is completed, Mr. White said. No time frame has been set on a decision regarding combination, he added.
Southwest had a $3.48 billion 401(k) plan and a $1.58 billion pilots 401(k) plan as of Sept. 30, 2009, according to Pensions & Investments estimates. The company contributed a total of $203 million to its plans in 2009 and $243 million in 2008, according to its 10-K filing.
AirTran’s 401(k) plan has $111 million in assets, according to BrightScope, a 401(k) plan rating service. AirTran contributed $1.4 million to the plan in both 2008 and 2009, according to the company’s 10-K filing.
Mr. White said plan asset totals and investment managers were not immediately available.
Paul Flaningan, Southwest spokesman, said he couldn’t immediately respond with information.