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Frontier to Buy Spirit Airlines in Deal Valued at $6.6 Billion

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A Frontier airlines plane is seen at the Las Vegas International Airport in Las Vegas.
Daniel Slim/AFP via Getty Images

Frontier has agreed to buy Spirit Airlines , creating a combined ultra-low-fare airline to rival America’s largest airlines.

The transaction values Spirit at a fully diluted equity value of $2.9 billion, with a transaction value of $6.6 billion when including net debt and operating lease liabilities, the companies said.

The deal implies a value of $25.83 per Spirit share, representing a 19% premium to Spirit’s closing price on Friday. Spirit shareholders will receive 1.9126 shares of Frontier plus $2.13 in cash for each Spirit share they own.

The merger will allow the combined company to “compete even more aggressively” against the big four U.S. airlines– American (AAL), Delta (DAL), Southwest (LUV), and United (UAL)–among others, Frontier and Spirit said in a joint statement.

Spirit CEO Ted Christie said the idea was to create an “aggressive ultra-low-fare competitor,” ultimately leading to more consumer-friendly fares.

Spirit Airlines stock (SAVE) rose more than 12% in premarket trading, while Frontier Group (ULCC) was 1.5% lower.

The merger, set to close in the second half of the year, is expected to deliver annual run-rate operating synergies of about $500 million. The companies also said the deal would deliver $1 billion in annual consumer savings, with more ultra-low fares to more destinations. The combined company is expected to add 10,000 jobs by 2026

“Together, Frontier and Spirit expect to change the industry for the benefit of consumers, bringing more ultra-low fares to more travelers in more destinations across the United States, Latin America and the Caribbean, including major cities as well as underserved communities,” they said.

Write to Callum Keown at

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