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JetBlue Signs Deal To Acquire Spirit Airlines For $3.8 Bln

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JetBlue Airways Corp. (JBLU) and Spirit Airlines, Inc. (SAVE) announced on Thursday that their boards of directors have approved a definitive merger agreement under which 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 $0.10 per month starting in January 2023 through closing. The deal is valued at an aggregate fully diluted equity value of $3.8 billion and an adjusted enterprise value of $7.6 billion.

This deal will create the nation's fifth largest airline if it is approved by US regulators. The agreement on Thursday comes a day after Spirit's attempt to merge with Frontier Airlines fell apart. Spirit had recommended its shareholders approve a lower offer from Frontier, saying that anti=trust regulators are more likely to reject the bid from JetBlue.

"This combination is an exciting opportunity to diversify and expand our network, add jobs and new possibilities for crewmembers, and expand our platform for profitable growth." JetBlue CEO Robin Hayes said in a statement.
The combined airline, which will be based in New York and led by Hayes, would have a fleet of 458 aircraft. The airlines will continue to operate independently until after the transaction closes.

The acquisition is expected to accelerate JetBlue's organic growth plan with 1,700+ daily flights to more than 125 destinations in 30 countries based on December 2022 schedules.

The acquisition will also increase JetBlue's presence in certain key focus cities (Fort Lauderdale, Orlando, San Juan, and Los Angeles) as well as Big Four airline hubs (Las Vegas, Dallas, Houston, Chicago, Detroit, Atlanta, and Miami)


If the transaction is completed before December 2023, the deal will be for $33.50 per share, increasing over time to up to $34.15 per share, in the event the transaction closes at the outside date in July 2024.

If the deal doesn't close due to antitrust reasons, JetBlue will pay Spirit a reverse break-up fee of $70 million and stockholders of Spirit a reverse break-up fee of $400 million less any amounts paid to stockholders of Spirit prior to termination.
JetBlue anticipates $600-700 million in annual savings once the transaction is complete. Annual revenue for the combined company is anticipated to be about $11.9 billion, based on 2019 revenues.

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