(MIRAMAR, FLA) — JetBlue Airways announced Thursday that it will purchase Spirit Airlines, headquartered in Broward County, for $3.8 billion shortly after a merger between Spirit and Frontier Airlines fell through.
JetBlue is nearing a deal to buy Spirit, according to people familiar with the matter https://t.co/79A901Yn3m
— The Wall Street Journal (@WSJ) July 28, 2022
The purchase will create the nation’s fifth-largest airline if it goes through. Even though there is concern whether regulators will approve a deal with JetBlue, shareholders balked at accepting Frontier’s less-valuable cash-and-stock offer when JetBlue’s all-cash offer was put on the table.
The deal announced Thursday would pay Spirit shareholders $33.50 per share in cash, including a prepayment of $2.50 per share in cash payable upon Spirit stockholders’ approval of the transaction before the deal closes.
Denver-based Frontier has a focus on the Rocky Mountain region of the United States. They’ve also got focus cities, or smaller hubs, in nine other US cities including Miami and Atlanta. Most 115 of Frontier’s destinations are within the United States.
JetBlue has hubs in New York City, Boston, Washington, DC and Fort Lauderdale. Flights to the majority of their East Coast destinations are readily available and booking, cancellations and changes are also a little easier to navigate with JetBlue.
If JetBlue closes the deal this year at $33.50, it’ll be a 38% premium over Spirit’s closing price Wednesday and about $1 billion more than Frontier’s offer had been worth. Shares of Spirit (SAVE) were up 4% in premarket trading on the news, while JetBlue (JBLU) shares were little changed. Frontier shares rose 6%.