BREAKING: JetBlue will buy Spirit Airlines for $3.8 billion, creating the fifth largest airline in the United States.
The agreement Thursday comes daily once Spirit’s commitment to merging with Frontier Airlines fell apart. Spirit had suggested its shareholders approve a lower supply from Frontier, spoken communication that just regulators are additional doubtless to reject the bid from JetBlue.
“This combination is associate exciting chance to diversify and expand our network, add jobs and new potentialities for crew members, and expand our platform for profitable growth.” JetBlue chief operating officer Robin Hayes aforementioned during a statement.
The combined airline, which can be based mostly in big apple and semiconductor diode by Hayes, would have a fleet of 458 craft. The airlines can still operate severally till once the group action closes.
JetBlue aforementioned Thursday that it’d pay $33.50 per share in money for Spirit, together with a payment of $2.50 per share in money owed once Spirit stockholders approve the group action. There’s additionally a ticking fee of ten cents per month beginning in Jan 2023 through closing.
If the transaction is completed before December 2023, the deal will be for $33.50 per share, increasing over time to up to $34.15 per share, in the event the transaction closes at the outside date in July 2024.
If the deal doesn’t close due to antitrust reasons, JetBlue will pay Spirit a reverse break-up fee of $70 million and stockholders of Spirit a reverse break-up fee of $400 million less any amounts paid to stockholders of Spirit prior to termination.
News of the JetBlue and Spirit combination comes after weeks of Frontier and JetBlue tussling over who would ultimately get to add the budget airline to its arsenal. While Spirit initially struck a deal with Frontier and had stood by that proposed agreement, its shareholders were not on board. The decision by Spirit and Frontier to terminate their deal was announced Wednesday while Spirit shareholders were still voting on the proposal. It was apparent that despite the support of Spirit’s board, shareholders were prepared to reject the deal and seek a richer one from JetBlue.
JetBlue anticipates $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.
JetBlue and Spirit will continue to operate independently until after the transaction closes. Their respective loyalty programs remain unchanged and customer accounts will not be affected in any way.
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.
Spirit’s stock rose more than 4% before the market opened, while shares of JetBlue were up slightly.