United Airlines parent UAL Corp. and Continental Airlines Inc. agreed to merge in a stock swap valued at more than $3 billion that will create the world’s biggest carrier by passenger traffic.

United’s name and Chicago headquarters will be retained, while Continental Chief Executive Officer Jeff Smisek, 55, will become the CEO and United’s Glenn Tilton, 62, will be non- executive chairman, the companies said today in a statement. Each Continental share will be exchanged for 1.05 UAL shares.

United and Continental together would take the top spot in global traffic from Delta Air Lines Inc., with hubs in New York and Washington and the most traffic among U.S. carriers on high- fare Atlantic and Pacific routes. The airlines reignited merger talks last month after negotiations collapsed two years ago.

Annual cost savings and new revenue from the tie-up should reach $1 billion to $1.2 billion by 2013, the airlines said. The transaction requires approval by shareholders and regulators.

Existing travel reservations won’t be affected, and customers won’t see any operational changes until after the deal closes near the end of this year, the companies said on a website dedicated to the merger.

(Source: Bloomberg.com)