The Spirit-Airlines-acquisition saga that made headlines back in February appears to be coming to an end.
After a bidding war, per the AP, JetBlue Airways is set to acquire Spirit, just one day after the budget carrier’s deal with Frontier Airlines fell through — that deal was postponed four times. The new merger, which would close for $3.8 billion if approved by antitrust regulators, resulting in the nation’s fifth-largest carrier airline, faced several challenges along the way.
The Biden Administration has been cracking down on anticompetitive conduct as it relates to industries including Big Tech, health care, airlines, and agriculture. That’s why Spirit rejected JetBlue’s $33-per-share offer on May 2, a “60% premium to the value of the Frontier transaction,” according to a statement from the airline. At the time, JetBlue was even going to Spirit shareholders to convince them of the bargain, per CNN, but antitrust concerns continued to thwart their efforts.
But by early this week, it had become apparent that Spirit shareholders were prepared to reject the Frontier offer in favor of JetBlue‘s, leading to the deal’s preemptive termination, the AP reported. Now, as a merger with JetBlue seems all but inevitable, Spirit CEO Ted Christie is attempting to defend the new direction.
“A lot’s been said over the last few months obviously, always with our stakeholders in mind,” Christie said on CNBC. “We have been listening to the folks at JetBlue, and they have a lot of good thoughts on their plans for that.”
This morning, JetBlue sent an email to its TrueBlue members regarding the announcement. “As you can imagine, combining two airlines takes time and we still have a lot more work to do behind the scenes,” JetBlue CEO Robin Hayes wrote. “After close, the combined airline will operate under the JetBlue brand.”
Ultimately, all Spirit aircraft will be converted to JetBlue, but until the transaction is finalized, both carriers will continue to operate independently, per Hayes’s note.
The deal is expected to close by the first half of 2024, but if it is called off for one reason or another, JetBlue will owe Spirit a reverse break-up fee of $70 million and pay Spirit shareholders $400 million minus any amounts paid to shareholders up to that point.