United is exploring a merger, report says

ELK GROVE VILLAGE, Ill. -- Shares in United Airlines' parent company, UAL Corp., rose yesterday following a published report that it has retained Goldman Sachs Group Inc. to explore strategic options, including possible mergers with other carriers.

Goldman Sachs is expected to help United assess the value of its domestic and international holdings, advise it on sales or purchases of domestic or global routes and scout for mergers, according to yesterday's edition of Crain's Chicago Business, citing unidentified people close to United.

United declined to comment on the report. ``We don't comment on rumors or speculation," spokeswoman Jean Medina said.

Goldman Sachs spokeswoman Andrea Rachman said the New York investment bank also declined to comment.

Shares in UAL rose 63 cents to close at $28.45 on the Nasdaq Stock Market after earlier climbing nearly 6 percent.

The reported hiring comes at a time when UAL chairman and chief executive Glenn Tilton has been talking openly about the need for consolidation in the US airline industry and signaling the possible involvement of United, the second-largest carrier.

Following a speech in Chicago last week, Tilton said UAL is on solid footing to participate in the merger and acquisition market following three years of restructuring in bankruptcy, which ended in February. He did not speculate on which airlines might come into play, but said United would consider opportunities that arise.

Continental Airlines Inc., parent of the fifth-largest US carrier, has long been considered a good potential partner for United because of a network that would be a complementary strategic fit. Delta Air Lines Inc. also has been speculated about, for similar reasons. Either merger would create the largest US airline.