JetBlue and Spirit confirm $5.43 billion merger
US low-cost carriers JetBlue Airways and Spirit Airlines announced that their board of directors have approved a merger between the companies.
The agreement means that JetBlue will acquire Spirit for USD$33.50 (AUD$47.88) per share in cash, including a prepayment of USD$2.50 (AUD$3.57) per share in cash payable upon Spirit stockholders’ approval of the transaction.
There is also a ticking fee of USD$0.10 (AUD$0.14) per month starting in January 2023 through closing, for an aggregate fully diluted equity value of USD$3.8 billion (AUD$5.43 billion) and an adjusted enterprise value of USD$7.6 billion (AUD$10.86 billion).
The companies characterised the merger as a “national low-fare challenger to the dominant big four airlines,” in a statement released last week.
“We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers, on more routes,” Robin Hayes, CEO of JetBlue, said.
If the deal is approved, it would further consolidate the US air industry, which is currently dominated by Delta, American, United and Southwest.
“We are thrilled to unite with JetBlue through our improved agreement to create the most compelling national low-fare challenger to the dominant U.S. carriers, and we look forward to working with JetBlue to complete the transaction,” Ted Christie, president and CEO of Spirit said.
This merger followed Frontier Airlines’ efforts to acquire Spirit Airlines, which ended abruptly last week after the companies terminated their proposal.
In a press release from Spirit, the airline confirmed it was ending its proposed merger agreement with Frontier Group Holdings, Inc., the parent company of Frontier Airlines, Inc.
“While we are disappointed that we had to terminate our proposed merger with Frontier, we are proud of the dedicated work of our team members on the transaction over the past many months,” Christie said.
“Moving forward, the Spirit board of directors will continue our ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our stockholders.”
This announcement came before Spirit was set to announce the results of a shareholder vote on Frontier’s acquisition offer.
Spirit repeatedly delayed the vote as it tried to persuade shareholders to support the merger and ignore the more valuable offer from JetBlue.
JetBlue and Spirit’s merger will face legal challenges from US government antitrust regulators, who are aiming to be tougher than their predecessors on mergers that reduce competition, according to The New York Times.
Frontier’s USD$2.8 billion (AUD$4 billion) was offered in cash and stock, which was outdone by JetBlue’s offer.
Email the Travel Weekly team at traveldesk@travelweekly.com.au
american delta JetBlue JetBlue Airways Robin Hayes southwest spirit airlines Ted Christie unitedLatest News
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