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Frontier and Spirit Sign $6.6 Billion Merger Deal

Frontier and Spirit merge to form the fifth largest US airline in a $6.6 billion deal

Frontier Airlines and Spirit, the two largest low-cost carriers in the United States, have agreed to combine their businesses in a deal valued at about $6.6 billion to form the nation’s fifth largest airline.

The transaction will give Frontier a controlling 51.5% stake in the resulting company, and Spirit investors will receive 1,9126 Frontier shares plus $2.13 in cash for each share they own, about 19% more than Spirit’s closing price last week.

Over the weekend, the board of directors of the two companies approved the deal, which will be the first of its kind between two American airlines since 2016, when Alaska Airlines merged with Virgin America. Most of the industries are subject to scrutiny by regulators.

Shares of Spirit surged more than 17% after the deal was announced to close at $25.46, while Frontier shares ended the day 3.5% higher to $12.82.

The two companies did not reveal the name of the new airline resulting from the deal, not even the CEO or the headquarters, knowing that the deal comes at a time when airlines are still struggling to recover from the recession they witnessed during the epidemic, but the sector has witnessed a glimmer of hope. During the beginning of the year although many flights were canceled due to the Omicron outbreak.

Notably, Boeing’s stock has been rated among the top 5 stocks to invest in at the moment by Top Ranks’ top analysts. To read more [Airlines Shares Rise Despite Flight Cancellations] and [Top 5 Stocks Right Now, In Conjunction With Volatile Markets]

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