If the deal is approved, it will create the nation's fifth largest airline.
On Thursday, the agreement came a day after the collapse of the merger between the two airlines. The shareholders of Spirit were recommended to approve a lower offer from Frontier.
It's an exciting opportunity to expand our network, add jobs and new possibilities for crew members, and expand our platform for profitable growth. The CEO of the airline said in a statement.
The combined airline would have a fleet of over 500 aircraft. After the transaction closes, the airlines will remain independent.
The airlines said it would pay $33.50 per share in cash and a prepayment of $2.50 per share in cash once the deal is approved. There is a fee of 10 cents per month for a period of three years.
If the transaction is completed before December 2023, the deal will be for $33.50 per share, increasing over time to up to $34.15 per share, if the transaction closes in July 2024.
If the deal doesn't close due to antitrust reasons, JetBlue will pay a reverse break-up fee of $70 million and stockholders of Spirit will get a reverse break-up fee of $400 million less.
$600- 700 million in annual savings is expected once the transaction is completed. The combined company is expected to have annual revenue of $11.9 billion.
The deal needs to be approved by the stockholders. The transaction is expected to be completed no later than the first half of the year of 2020.
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