The board of directors of Spirit Airline has rejected the proposal from JetBlue to acquire the airline and will proceed with its existing merger agreement with Frontier, the airline announced in a press release. A low probability of receiving antitrust clearance and an unacceptable level of closing risk make a deal with JetBlue unattractive to its shareholders.
After Frontier announced its plans to buy Spirit in a cash and stock deal valued at $2.9 billion in February, JetBlue followed up with an all-cash offer of $3.6 billion last month. In case antitrust issues prevented the deal from going through, the airline offered to throw in a $200 million breakup payout. The deal was rejected by Spirit because of its main concern being the North American Alliance with American Airlines.
Spirit believes a deal with JetBlue won’t dissipate the DOJ’s concerns
The NEA is an initiative to combine their services in New York City and Boston. The NEA is supposed to make it easier for passengers to board connecting flights from both airlines. The Department of Justice (DOJ) filed an antitrust complaint against the alliance last September, stating that it will eliminate important competition in these cities, and will also harm air travelers across the country.
The DOJ's concerns may not benefit passengers if a deal is not reached with JetBlue.
The deal with Frontier is expected to close in the second half of 2022. The deal will make Frontier the fifth largest airline in the US.