This is a big deal.
It was announced in February that Frontier was going to acquire Spirit. It didn't go as smoothly as the two companies had hoped, as JetBlue tried to get in on the action, and also made a bid for Spirit. There is a big update after a lot of back and forth.
The merger agreement between Frontier and Spirit has been terminated, and the company will go ahead with a merger with another airline. Ted Christie described this decision.
“While we are disappointed that we had to terminate our proposed merger with Frontier, we are proud of the dedicated work of our Team Members on the transaction over the past many months. Moving forward, the Spirit Board of Directors will continue our ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our stockholders.”
The management and board of Spirit preferred a takeover by Frontier over a takeover by JetBlue. It seems like the hostile takeover attempt was a success. The merger with Frontier was defeated by the shareholders.
It will be fascinating to see how this plays out. On the surface, it looked like Frontier had a better offer. There were concerns about whether the deal would get antitrust approval given the impact it would have on competition.
If the deal doesn't work out due to regulatory concerns, the company offered a large reverse terminated fee. Now is the time for the two companies to come up with something.
I am sad to see this new development. I think it is unlikely that we will see a merger in the near future. If a merger were to happen, I would rather see the merging of the two airlines than the merging of the two airlines.
What's the reason? Both airlines have something going for them, even though they are too different. The two airlines will end up being a hybrid between the two airlines, which I don't see being pretty.
How do you combine the two leading coach products? What do you do to combine the two? When the airlines combine, the flights will be late by hours.
The merger between Frontier Airlines and Spirit Airlines has been called off, and the airline will now go ahead with a merger with a different carrier. The catch was that there were major concerns about the deal getting approval. The reverse terminated fee was offered by the airline. Let's see what happens now.
What do you think about the proposed merger between the two airlines?
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