UPDATE 1-EU exec set to okay UAL, Continental deal – source

* EU expected to give unconditional approval

* Airlines have not offered concessions to EU regulator

* U.S. regulators reviewing the deal

(Adds EU Commission no comment, background)

By Foo Yun Chee

BRUSSELS, July 22 (BestGrowthStock) – United Airlines is expected to
win unconditional EU approval next week for its $3.17 billion
buy of Continental Airlines Inc (CAL.N: ) to form the world’s
largest carrier, a source close to the case said on Thursday.

The two airlines unveiled the deal in May, saying the
combined company would fly to 370 destinations and have 10 hubs
worldwide, helping it to attract more business travellers. [ID:nN02143069]

“This is expected to be a phase 1 clearance,” the source
said, adding the airlines had not offered any commitments to the
regulator as there were no direct overlaps between the carriers
in Europe.

The European Commission, the antitrust watchdog in the
27-country European Union, approves mergers and acquisitions
without an in-depth investigation in phase 1 if it finds that
the deal does not harm competition.

The EU executive has set a July 27 deadline for its
decision. It granted unconditional approval of U.S. carrier
Delta Air Lines’ (DAL.N: ) acquisition of rival Northwest Airlines
in 2008, saying the deal would not significantly affect
competition.

The Commission declined to comment on Thursday.

U.S. regulators are mow reviewing the deal.

Some U.S. senators are strongly opposed to it, saying it
would hurt consumers and reduce competition. Congress cannot
block the transaction but can influence regulators and public
opinion.

The airlines expect to close the deal before the end of
2010.

United and Continental expect to generate between $1 billion
and $1.2 billion in annual sales and cost benefits by 2013.

The global downturn has taken a steep toll on the airline
industry, which has also been battling with volatile fuel
prices, low-cost competition and overcapacity. The industry is
now starting to recover.

United’s parent UAL Corp (UAUA.O: ) posted on Tuesday its
first quarterly operating profit since 2007.

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(Reporting by Foo Yun Chee, editing by Will Waterman)

UPDATE 1-EU exec set to okay UAL, Continental deal – source