JetBlue strikes $3.8 billion deal to buy Spirit Airlines
PBS NewsHourDec 27, 2022
The Facts
After months of attempting to merge with Frontier Airlines and spurning purchase offers from JetBlue, Spirit accepted JetBlue's $3.8B offer on Thurs. in a deal that could create the nation's fifth-largest airline.
The all-cash deal, which they hope will receive approval from antitrust regulators and close by the first half of 2024, requires JetBlue to pay $33.50 a share, including a prepayment of $2.50 per share once Spirit stockholders approve the purchase.
The Spin
Narrative A
Regulators are going to have to take a close look at this deal, which undoubtedly is going to lead to one major thing for consumers: higher airfares. Even if you don't fly Spirit or Frontier, their presence on certain routes forces other airlines to lower their prices. The elimination of Spirit will remove that incentive.
Narrative B
Spirit finally came to its senses and accepted JetBlue's offer, which was much richer than anything it could've received from Frontier. Gaining regulatory approval will be difficult, but if JetBlue and Spirit make some concessions, they'll get this deal through. Then the "Big Four" will finally have some true competition.
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