Frontier Airlines’ has announced plans to buy Spirit Airlines in a $2.9 billion cash-and-stock deal. The partnering of the two airlines will allow the combined airline to be more competitive against the larger rivals.
“Together, Frontier and Spirit expect to change the industry for the benefit of consumers, bringing more ultra-low fares to more travelers in more destinations across the United States, Latin America and the Caribbean, including major cities as well as underserved communities,” the companies said in a joint press release Monday.
Spirit shareholders will receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own. This infers a value of $25.83 per Spirit share at Frontier’s closing stock price of $12.39 on Friday.
The deal is valued at $6.6 billion with the accounting for the assumption of debt and operating lease liabilities.
“The stronger financial profile of the combined company will empower it to accelerate investment in innovation and growth and compete even more aggressively, especially against the dominant “Big Four” airlines, among others.”