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Flying J, Pilot Merger Date Delayed
The "drop-dead date" for the merger of truck stop operators Flying J and Pilot Travel Centers, originally set for March 31, was extended to April 30.
After this date, neither party has any obligation to complete the merger. In addition, the exclusivity period also was extended, lengthening the period of time Flying J agrees not to have discussions with other acquirers and/or investors.
It appears the merger is ready to go as due diligence has been completed; transaction documents are drafted; specified consents have been received; more than $2 billion in financing has been arranged; and the reorganization plan was approved by creditors. The one detail remaining is the approval of the government's antitrust authorities.
Customers, competitors, suppliers and the government are concerned the new combined entity will be an "800-pound gorilla" with more than 600 locations, $20 billion in revenue (depending on the price of fuel), $700 million in operating profits and a dominant 20-percent market share of the "on road" diesel fuel market. Both Flying J and Pilot agreed to work together to overcome antitrust issues both national and local in scope. The combined entity may need to divest some locations due to combined market dominance, according to published reports.
Flying J filed for bankruptcy in December 2008, and entered into a merger agreement with Pilot in July 2009.