JetBlue buys Spirit for $3.8 billion, forming nation's fifth-largest airline
JetBlue is buying Spirit Airlines for $3.8 billion, creating the nation's fifth-largest airline.
The agreement, announced Thursday, comes a day after Spirit's attempt to merge with Frontier Airlines fell apart.
JetBlue will acquire Spirit for $33.50 per share in cash, including a prepayment of $2.50 per share in cash payable once Spirit stockholders approve the transaction. There's also a ticking fee of 10 cents per month starting in January 2023 through closing.
The Frontier offer for Spirit was worth more than $2.6 billion in cash and stock, far short of JetBlue's all-cash bid.
"We believe we can uniquely be a solution to the lack of competition in the U.S. airline industry and the continued dominance of the Big Four," JetBlue CEO Robin Hayes said in a statement in a reference to American, United, Delta and Southwest. "By enabling JetBlue to grow faster, we can go head-to-head with the legacies in more places to lower fares and improve service for everyone.
The combined carrier will have a fleet of 458 aircraft and add more than 1,700 daily flights to more than 125 destinations in 30 countries.
The agreement ends a months-long battle for Spirit between JetBlue and Frontier. New York-based JetBlue mounted a furious campaign to convince Spirit shareholders to reject the Frontier offer. It worked — forcing Spirit's board to postpone a vote on the Frontier proposal four times.
JetBlue expects $600 million to $700 million in annual savings once the transaction is complete. Annual revenue for the combined company is anticipated to be about $11.9 billion, based on 2019 revenues.
The deal still needs the required regulatory approvals and approval from Spirit's stockholders. The companies expect to conclude the regulatory process and close the transaction no later than the first half of 2024.
