JetBlue Airways arrived at a deal to purchase Spirit Airlines, hours after the discount carrier rejected plans to converge with Frontier Airlines.
The New York-based carrier said it will pay $33.50 a share in cash for Spirit in a $3.8 billion deal.
A JetBlue acquisition of Spirit would make the country’s fifth-biggest carrier and, whenever supported by controllers, would leave Frontier as the biggest discount carrier in the U.S.JetBlue’s past surprise, all-cash bid for Spirit in April had thrown Spirit’s plan to consolidate with fellow discounter Frontier into question. For months, Frontier and JetBlue vied for Spirit, each improving their offers, until the original merger plan fell apart Wednesday, making room for JetBlue.
Spirit had said it wanted to proceed with converses with offer itself to JetBlue in the wake of finishing the Frontier agreement.
JetBlue leaders have contended for months that purchasing Miramar, Florida-based Spirit would assist it with rivaling enormous carriers like American, Delta, United and Southwest, which control the greater part of the U.S. market, and fast-track its development by giving it access to additional Airbus jetliners and pilots, the two of which are hard to find.
JetBlue wants to renovate Spirit’s planes in JetBlue style, highlighting seatback screens and more legroom.
Spirit recently repelled JetBlue’s offers and said such a deal wasn’t probably going to be endorsed by controllers, to a limited extent since JetBlue’s alliance with American, which the Justice Department sued to hinder a year ago. The deal faces a high hurdle for regulatory approval.
Spirit shares were up over 4% in premarket trading after the deal was declared, while JetBlue was up 0.5%.