JetBlue lands Spirit for $3.8B
Deal caps a lengthy battle that derails a Spirit-Frontier deal and expands JetBlue
JetBlue Airways is acquiring deep-discounter Spirit Airlines Inc. for at least $3.8 billion in cash, clinching a deal less than a day after Spirit called off a planned merger with Frontier Group Holdings.
JetBlue will pay $33.50 per share for Spirit, or as much as $34.15 depending on timing, the airlines said in a joint statement Thursday. That includes a $2.50-a-share prepayment once Spirit stockholders approve the deal agreed to by the airlines’ boards, they said.
The agreement caps a more than three-month battle by JetBlue to derail the Spirit-Frontier deal and secure a chance to expand its own network, fleet and access to pilots. While Spirit’s board had stood by the rival
A JetBlue airliner lands past a Spirit Airlines jet on a taxiway at Fort Lauderdale Hollywood International Airport in Florida on April 25.
Frontier proposal, that $2.6 billion stock-and-cash deal collapsed late Wednesday after the companies failed to garner enough shareholder support.
“We want to get this deal done,” JetBlue Chief Executive Officer Robin Hayes said in an interview, noting his company’s plans to divest some assets to help win approval from skeptical regulators. The carriers will operate independently until after receiving regulatory
approval and the transaction closes, which the companies expect no later than the first half of 2024.
JetBlue is banking on the combination to give it sufficient scope to effectively influence pricing against the nation’s largest airlines, which control about 80% of the U.S. market. The carrier aims to lure away their passengers with lower fares and a nearly comparable onboard product. A merger would cement JetBlue as the fifthlargest carrier in the U.S. based on domestic passenger traffic.
Spirit shares rose 3.5% at 9:52 a.m. in New York, while JetBlue fell 1.2%. and possibly at other crowded airports, to help secure approval.
JetBlue already faces opposition from the Justice Department, which has sued to break up its commercial agreement with American Airlines Group Inc. The regulators allege that partnership — which targets the New York and Boston markets — is anticompetitive.