A definitive merger agreement between Frontier Group Holdings, Incorporated and Spirit Airlines, Incorporated — which are the respective parent companies of Frontier Airlines and Spirit Airlines — was announced on Monday, February 7, 2022; and it was supposed to result in the creation of the fifth largest airline in the United States once the merger is completed, as the controlling stockholders of Frontier Airlines had approved both the transaction and related issuance of shares of common stock of Frontier Airlines upon signing of the merger agreement…
Frontier Airlines and Spirit Airlines Will Not Merge After All
…but the merger agreement certainly was not definitive as once thought, as the board of directors as Spirit Airlines voted on terminating its merger with Frontier Airlines, according to this official press release:
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,” said Ted Christie, President and CEO of Spirit Airlines. “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.
This message at the official Internet web site of JetBlue Airways urged shareholders of Spirit Airlines to vote against the merger with Frontier Airlines — plus details about its “superior proposal” include:
- At least $33.50 per share and up to an estimated $34.15 per share in cash, including the prepayment of $2.50 per share promptly following Spirit shareholder approval, up to $1.80 per share in ticking fee payments, and payment at closing between $29.85 and $31.00 per share, depending on when the transaction is consummated
- Significantly stronger regulatory commitments — including a higher, $400 million reverse break-up fee and divestiture commitments that meaningfully exceed the divestiture commitment from Frontier — despite similar regulatory profile to Frontier transaction
- Economic analysis shows JetBlue’s presence on nonstop routes decreases legacy fares 3x as much as ultra-low-cost airlines
- Less overlap in flights, seats, and ASMs than Frontier in metro areas served by both
Final Boarding Call
The offers from JetBlue Airways still have not been voted on or approved by the board of directors at Spirit Airways — nor are they certain to meet approval from regulators — but the way has now been paved for that to potentially happen…
…but just because Frontier Airlines is now officially no longer being considered to merge with Spirit Airlines does not mean that JetBlue Airways will automatically be the winner, as there are still many hurdles to overcome in the process.
No official comment or response had been released from Frontier Airlines at the time this article was written.
Money talks, I suppose…
All photographs ©2015, ©2018, and ©2022 by Brian Cohen.