The Atlanta, Georgia based – Delta Air Lines Inc. and the Eagan, Minnesota based – Northwest Airlines yesterday agreed to merge, which will create the world's largest airline. The Delta Air Lines agreed to acquire Northwest Airlines Corp. in a $3.1 billion stock deal late Monday.

The merger took place despite failed efforts to get pilots at both airlines to agree on how to combine their ranks, an issue that could lead to labor unrest and disruptions to flight operations.

7 directors from Delta Air Lines and 5 from Northwest Airlines would form the board of the new airline, to be known as Delta. The Air Line Pilots Association, which represents pilots at both airlines, would receive a seat.

The third-biggest U.S. airline by traffic, Delta Air Lines reported that the new airline would keep Delta's name, Atlanta headquarters, and 52-year-old chief executive officer, Richard Anderson.

According to the reps from the two airlines, the purchase deal will create a total of $1 billion in new revenue and savings and they won't shut any hubs. Each Northwest share will be exchanged for 1.25 Delta shares, a 16.8 percent premium based on today's closing price. Northwest shareholders would receive 1.25 Delta shares for each of 236.4 million Northwest shares outstanding. That represents a premium of 17 percent based on Monday’s closing prices. Delta closed 48 cents higher at $10.48; Northwest closed up 26 cents, to $11.22.