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JetBlue to Acquire Spirit | Business Travel News


JetBlue and Spirit Airlines have signed a merger agreement
for the former to take over the low-cost carrier for $3.8 billion, the airlines
announced Thursday. The deal comes one day after Spirit and Frontier Airlines called
off their merger agreement. JetBlue and Frontier had been vying for Spirit
since April. 

If approved, the deal will create the fifth-largest airline
in the United States and be a “national low-fare challenger to the dominant big
four airlines.” The combined entity would be based in New York and led by JetBlue
CEO Robin Hayes, according to the companies.

Under the terms of the agreement, JetBlue will acquire Spirit
for $33.50 per share in cash, including a prepayment of $2.50 per share in cash
payable upon Spirit stockholders’ approval of the transaction, and a ticking
fee of 10 cents per month starting in January 2023 through closing.

“We are excited to deliver this compelling combination that
turbocharges our strategic growth, enabling JetBlue to bring our unique blend
of low fares and exceptional service to more customers, on more routes,” Hayes
said in a statement. 

“Bringing our two airlines together will be a game changer,
and we are confident that JetBlue will deliver opportunities for our guests and
team members with JetBlue’s unique blend of low fares and award-winning service,”
Spirit president and CEO Ted Christie said in a statement.

The companies expect to conclude the regulatory process and
close the transaction “no later than the first half of 2024,” but the deal is
far from assured of gaining approval. JetBlue’s Northeast Alliance with
American Airlines has a pending
antitrust suit against it, with the plaintiffs calling it a “de facto
merger” between the carriers in certain markets. 

A U.S. judge in June said the lawsuit would go forward, and
a trial in the case has been set for Sept. 26.

As part of the acquisition terms, JetBlue has committed to
divest Spirit’s holdings at the Northeast Alliance airports to allow for
allocation to other ultra-low-cost carriers, according to the airlines. 

RELATED: Spirit,
Frontier Call Off Merger

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