Frontier is buying Spirit Airlines in a deal worth $2.9 billion in cash and stock that will create the nation’s fifth-largest airline.
This tie-up is worth $6.6 billion when taking into account the hypothetical debt and other liabilities.
The companies said Monday that the deal will provide more low-cost tickets to more travelers to destinations in the US, Latin America and the Caribbean. Frontier Group Holdings Inc. and Spirit Airlines Inc. also predicts annual consumer savings of $1 billion and is looking to expand their service to more than 350 aircraft on order.
In addition, Frontier and Spirit are looking for more jobs. Companies expect to add 10,000 direct jobs and thousands more at their business partners by 2026.
“This transaction is focused on creating an aggressive ultra-low fare competitor to serve our guests even better, expand career opportunities for our team members, and boost pressure.” competition, resulting in more consumer-friendly fares,” said Spirit CEO Ted Christie in a prepared statement.
Carriers can be very closely scrutinized from antitoxin modifiers. The Biden administration has signaled a tougher line against large corporate mergers. However, airlines have endured a devastating blow during the pandemic despite support from the US, and are in a weakened position through 2022.
Existing Frontier shareholders will own approximately 51.5%, and existing Spirit shareholders will own approximately 48.5% of the combined airline shares. The transaction is expected to close in the second half of this year. It still needs approval from Spirit shareholders.
Spirit shareholders will receive 1,9126 Frontier shares plus $2.13 in cash for each existing Spirit share they own. This implies a value of $25.83 per Spirit share with Frontier’s closing share price of $12.39 on Friday.
The combined company is expected to have annual sales of about $5.3 billion, based on last year’s results. Its board of directors will include seven members named by Frontier and five members named by Spirit. Border Patrol President William Franke will serve as president of the combined company.
Shares of Frontier, which is based in Denver, were down 2.2% before the opening bell Monday. Shares of Spirit, which is based in Miami, rose 12.5%.
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https://www.winknews.com/2022/02/07/frontier-airlines-buying-spirit-in-3b-low-cost-carrier-deal/ Frontier Airlines buys Spirit in $3 billion deal with low-cost airline