Frontier Airlines and Spirit Airlines agree to combine, forming the 5th-largest airline in the US, according to a press release by Frontier and Spirit on Monday.
- The boards of both companies agreed on a deal over the weekend, prior to the CEOs of both airlines announcing the agreement in New York City.
- The arrangement, valued at $6.6 billion, is structured with Frontier Airlines controlling 51.5% of the combined airline while Spirit will hold the remaining 48.5%.
- Spirit investors will get 1.9126 shares of Frontier plus $2.13 in cash for every Spirit share they hold. The company stated that the deal signals a value of $25.83 per share, standing at a 19% premium over the value of Spirit shares.
- The companies are yet to determine the name of the person who will become the CEO of the combined carrier and the location of the airline’s headquarters.
The combined airline is projected to deliver $1 billion in annual consumer savings and expand with over 350 aircraft in order to deliver more ultra-low fares. ULCC down -1.78%, SAVE up +12.75%, pre-market trading.