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JetBlue buys Spirit Airlines for $3.8 billion

American low-cost airline JetBlue reached an agreement on Thursday for the acquisition of its competitor Spirit for 3,800 million dollars.

The announcement of the purchasewhich has yet to receive the green light from regulators and shareholders, comes a day after Frontier, another airline, abandoned a proposed merger with Spirit.

If materialized, the new group will become the fifth airline in the United States in number of places offered behind the “Big Four” formed by American, United, Delta and Southwest.

It will have 77 million customers and will hold 9% of the US market share, according to figures provided by both companies.

“Spirit y JetBlue will continue to advance our shared goal of transforming the industry to drive down fares for the Big Four airlines,” said CEO of JetBlueRobin Hayes, in a statement.

Spirit and Frontier had announced in February their intention to get closer.

But a few weeks later, JetBlue surprised by presenting a better financial offer to Spirit shareholders.

Faced with the rejection of the board of directors of Spirit, JetBlue launched a hostile takeover bid in May.

Spirit executives had repeatedly expressed their preference for a deal with Frontier, saying competition authorities would likely be reluctant to partner with JetBlue. But they did not convince the shareholders.

An extraordinary general meeting to approve the merger with Frontier was postponed four times and the operation was finally cancelled.

In the deal announced Thursday, Jetblue offers cash payment for shares of Spirit, at a unit price of $33.50, 38% higher than the share’s closing price on Wednesday.

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Both companies expect to complete the transaction before the end of the first half of 2024.

Shares of Spirit rose just over 4% to $25.29 in electronic trading before the open on Wall Street on Thursday.

those of JetBlue they gained 0.83% to $8.46.

AFP is a major global information agency that offers fast, verified and comprehensive coverage.

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