US-based low-cost airline JetBlue Airways has placed an unsolicited $3.6bn offer for budget carrier Spirit Airlines in a bid to create a stronger competitor to the ‘Big Four’ dominant airlines.
The move potentially complicates the merger plans of Spirit Airlines and Frontier Group Holdings, another budget carrier. The two companies signed a $2.9bn deal in February to combine their operations.
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JetBlue proposed to acquire Spirit for $33 per share in cash, representing a premium of 50% to Spirit’s closing share price on 4 April.
In a statement, JetBlue said that the offer is a ‘superior proposal’ compared to Frontier’s bid.
It added that the proposed combination will deliver $600m to $700m in net annual synergies following integration.
Based on 2019 revenues, the combined carrier will generate annual revenues of around $11.9bn. It will also operate more than 1,700 flights every day to more than 130 destinations in 27 countries.
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By GlobalDataFurthermore, the merger will support JetBlue’s sustainability goals.
JetBlue CEO Robin Hayes said: “The combination of JetBlue and Spirit – coupled with the incredible benefits of our Northeast Alliance with American Airlines – would be a game-changer in our ability to deliver superior value on a national scale to customers, crewmembers, communities and shareholders.
“The transaction would accelerate our strategic growth and create sustained, long-term value for the stakeholders in both companies.”
Separately, Spirit Airlines confirmed that it had received the unsolicited proposal from JetBlue Airways. The statement said that the Spirit Board of Directors would consult with financial and legal advisors to assess JetBlue’s proposal.
