Frontier to buy discounter Spirit airlines for $2.9bn

Frontier to buy discounter Spirit airlines for $2.9bn

Aviation















Bloomberg

Frontier Group Holdings Inc agreed to buy Spirit Airlines Inc. for $2.9 billion in cash and stock, uniting two ultra-low-cost carriers targeting the recovering US leisure-travel market. Spirit shares rose the most in 14 months.

Spirit investors will receive 1.9126 Frontier shares and $2.13 in cash for each Spirit share, according to a statement Monday. The deal implies a value of $25.83 a share for Spirit, a 19% premium based on closing prices on February 4.

The combination will bring Spirit back into the constellation of ultradiscounters led by William A. Franke, the managing partner of private equity firm Indigo Partners. Leisure travel has recovered more quickly from the slump caused by the coronavirus, and the ultra-low-cost carriers, with an unrelenting focus on fares and expenses, stand to grow quickly as travel normalizes.

Spirit, based in Miramar, Florida, and Denver-based Frontier share complementary cultures, fleets and geographical footprints, Spirit Chairman Mac Gardner said in the statement. “This combination is all about growth, opportunities and creating value for everyone — from our guests to our team members to the flying public at large,” he said.

Spirit jumped 16% to $24.74