Frontier Airlines is offering to buy Spirit Airlines in a $2.9 billion cash-and-stock deal that would create the nation’s fifth largest carrier.
A Frontier Airlines plane is reflected in a puddle on the tarmac at Denver International Airport.
The companies said Monday that the transaction will provide more low-cost fares for more travelers to destinations in the U.S., Latin America and the Caribbean. Frontier Group Holdings Inc. and Spirit Airlines Inc. also anticipate $1 billion in annual consumer savings and are looking to expand flights with more than 350 aircraft on order.
The two airlines reported fourth quarter financial results Monday and both lost money in the final three months of 2021, Spirit $87.2 million and Frontier $53 million. And like 2020, both companies lost money for the year. Spirit shareholders will receive 1.9126 shares of Frontier plus $2.13 in cash for each existing Spirit share they own. This implies a value of $25.83 per Spirit share at Frontier’s closing stock price of $12.39 on Friday.
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