Highlights:
- Flight networks to serve over 145 destinations across the United States, Latin America and the Caribbean
- Consumers to save $1 billion annually with ultra-low fares to more destinations
- Merger to add 10,000 direct jobs by 2026
On Monday February 7th, 2022, Spirit Airlines (NYSE: SAVE) and Frontier Group Holdings (NASDAQ: ULCC) announced a definitive merger agreement. They aim to create America’s most competitive ultra-low fare airline.
The deal is valued at $6.6 billion, in which Frontier Airlines will control 51.5% of the merged airline while Spirit will hold the remaining 48.5%.
Spirit Airline equity holders will receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own. The company said this deal will imply a value of $25.83 per Spirit share. This represents a premium of 19% at the closing price on February 4th, 2021.
“Together, Frontier and Spirit will be America’s Greenest Airline and deliver more ultra-low fares to more people in more places. I couldn’t be more excited for our team members, customers, partners, the communities we serve and our shareholders.” Barry Biffle, President & CEO said in a statement.
This consolidation of the two airlines comes amid forecasted profitability as lockdown restrictions continue to ease globally. The deal will lead to more low-cost airfare opportunities for its customers, with an expanded aircraft fleet and more streamlined operations. The deal is expected to close in the second half of this year.
Disclosure: The author holds no position in Spirit Airlines, Inc or Frontier Group Holdings, Inc. Freedom Stocks has a disclosure policy.
