Thread: Jet Blue/Spirit Deal Leaves Two ULCC's Allegiant & Frontier

JetBlue Airways has reached a $3.8 billion deal to buy Spirit Airlines that will create a combined carrier offering in excess of 1,700 daily flights to more than 125 destinations in 30 countries.
The agreement, worth $33.50 a share in cash, was announced hours after Spirit ended merger talks with Frontier Airlines. Should the acquisition secure approval from regulators, it will create the fifth largest airline in the US.
“Spirit and JetBlue will continue to advance our shared goal of disrupting the industry to bring down fares from the Big Four airlines,” JetBlue CEO Robin Hayes said.
Spirit had previously rebuffed JetBlue’s bids, saying a deal was unlikely to be approved given the US Justice Department is already suing to block JetBlue’s northeast alliance with American Airlines. It instead pursued a tie-up with Frontier.
However, Spirit shareholders rejected Frontier’s proposal given JetBlue’s all-cash tender offer was still on the table, which carried a substantial premium over the implied value of Frontier’s mostly-equity bid.
JetBlue will acquire Spirit for $33.50 per share in cash, including a prepayment of $2.50 per share in cash once the transaction has been approved by Spirit shareholders. The New York-based airline will also pay Spirit shareholders an additional 10 cents a month for any delay in closing after December 2022, which could increase the price to $34.15 a share.