Spirit-Frontier merger deal will create fifth-largest U.S. airline
Spirit Airlines (NYSE: SAVE) agreed to merge with Frontier Group (Nasdaq: ULCC) in a $2.9 billion cash-and-stock deal that expands to $6.6 billion once debt and lease liabilities are included.
Why it matters: This creates the fifth-largest U.S. airline, by combining the country's two largest budget carriers.
Details: Frontier shareholders will get 51.5% of the merged business, at an implied $25.83 per Spirit share (19% premium to Friday's closing price).
- Bill Franke of Indigo Partners, which holds more than an 80% stake in Frontier, will become the combined company's chair.
- The companies have not released information on a CEO or corporate name.
The bottom line: The companies say they will offer more than 1,000 daily flights to 145 destinations, and add 10,000 direct jobs by 2026.