Late Wednesday evening, a deal was made that could change the way people travel in the near future. According to multiple reports, JetBlue has agreed to a deal to purchase Spirit Airlines.
According to Reuters,
JetBlue Airways Corp (JBLU.O) is nearing a deal to buy Spirit Airlines (SAVE.N) that could be announced as soon as Thursday, a source familiar with the matter said, after Spirit canceled its $2.7 billion sale to Frontier Group Holdings (ULCC.O).
The latest developments mark a victory for JetBlue in its months-long battle for the ultra-low-cost carrier, though the potential combination is expected to kick off a fight with antitrust regulators, who have already sued to block JetBlue’s alliance with American Airlines (AAL.O).
A combination of JetBlue and Spirit would create the fifth-largest U.S. airline and be the most consequential U.S. airline industry merger since Alaska Air Group (ALK.N) bought Virgin America Inc for $2.6 billion in 2016.
JetBlue is offering terms similar to what it had proposed earlier, the source said. In June, JetBlue had offered $33.50 per share for Spirit, or roughly $3.7 billion, and a breakup fee of $400 million.
Earlier on Wednesday, Spirit canceled its sale to Frontier after failing to convince shareholders about its merits.
That development, first reported by Reuters, came after Spirit pushed back a shareholder vote on the Frontier deal four times, hoping it could muster enough support. Spirit had earlier argued that antitrust regulators were unlikely to clear JetBlue’s $3.7 billion bid.
The outcome was a setback for Frontier and its chairman Bill Franke, who was instrumental in kicking off talks between the sides last year. Franke’s airline-focused buyout firm, Indigo Partners, is a major shareholder in Frontier.
“While we are disappointed that Spirit Airlines shareholders failed to recognize the value and consumer potential inherent in our proposed combination, the Frontier board took a disciplined approach,” Franke said in a statement.
Stay tuned as more details will surface soon.
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