When I first heard that Alaska Airlines would be taking over Virgin America, I was puzzled because Virgin has built a very distinct brand that spans other product categories. I also assumed that any acquisition would have the support of Sir Richard Branson, the Founder of Virgin Group.
However, in his post On Virgin America, Branson provides the backstory on the creation of Virgin America and offers an interesting comment about the Alaska Airlines takeover:
I would be lying if I didn’t admit sadness that our wonderful airline is merging with another. Because I’m not American, the US Department of Transportation stipulated I take some of my shares in Virgin America as non-voting shares, reducing my influence over any takeover. So there was sadly nothing I could do to stop it.
Virgin America has its principal executive offices in Burlingame, California. In Silicon Valley, many companies are started by foreign-born founders. Some companies even have multiple classes of stock to maintain voting control in the hands of its founders. So, what was different about Virgin America that the US Department of Transportation required Richard Branson to take some of his shares as non-voting shares?