Allegiant to buy Sun Country in $1.5 billion cash and stock deal
A jet belonging to Allegiant Airlines flies from Las Vegas Airport.
Nick Potts | Getty Images
Loyal On Sunday, it said it was buying another budget carrier Land of the Sun in a $1.5 billion cash and stock deal.
The merger plan comes as budget airlines in the US face a rise in costs in the wake of the pandemic and domestic capacity expansion.
The implied value of the transaction is $18.89 for each Sun Country share. Shareholders of that carrier will receive 0.1557 shares of Allegiant common stock and $4.10 in cash for each Sun Country share owned, Allegiant said Sunday.
The airline said the deal represents a premium of almost 20% to Sun Country’s closing stock price of $15.77 on Friday.
The carriers’ executives will hold a special conference call at 8:30 a.m. ET on Monday to discuss the deal.
Allegiant Air CEO Greg Anderson expressed confidence that the deal would be approved in an interview with CNBC, noting that the two airlines have little network overlap. Allegiant approached Sun Country in late fall, he said, adding that Sun Country had a contract flight agreement. Amazon is set to continue.
The deal will test the Trump administration’s appetite for airline mergers.
Biden administration challenged JetBlue Airlines The acquisition of Spirit Airlines, which is currently in its second bankruptcy and struggling to survive. A federal judge sided with the Biden Justice Department and blocked the JetBlue-Spirit deal.
However, the Biden administration has made clear Alaska Airlines Approximately $2 billion acquisition of Hawaiian Airlines in 2024.
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