Frontier is offering to buy Spirit Airlines in a $2.9 billion cash-and-stock deal that will create the nation's fifth largest carrier. The tie-up is valued at $6.6 billion when accounting for the assumption of debt and other liabilities. The companies said Monday that the transaction will provide more low-cost fares for more travelers to destinations in the US, Latin America, and the Caribbean, per the AP. Frontier Group Holdings Inc. and Spirit Airlines Inc. also anticipate $1 billion in annual consumer savings and are looking to expand flights, with more than 350 aircraft on order.
The carriers may be in for a very close look from anti-monopoly regulators, however, as the Biden administration has signaled a tougher line against big corporate mergers. Airlines have suffered a devastating stretch during the pandemic, despite assistance from the US, and are in a weakened position heading into 2022. The two airlines reported fourth-quarter financial results Monday, and both lost money in the final three months of 2021: $87.2 million for Spirit, $53 million for Frontier. And like 2020, both companies lost money for the year.
The companies foresee adding 10,000 jobs internally and anticipate thousands of additional jobs at suppliers and companies by 2026. Existing Frontier shareholders will own approximately 51.5% of the combined airline, Spirit stockholders 48.5%. Frontier Chair William Franke would serve as chairman of the combined company, whose name has yet to be determined, Spirit CEO Ted Christie told CNBC. Its headquarters would be determined by a committee led by Franke prior to the transaction's closing. The transaction, which still needs approval from Spirit shareholders, is expected to close in the second half of the year.
(More
Frontier Airlines stories.)
,
uBlock 
,
and
Ghostery 
)
