JetBlue, Spirit scrap $3.8B acquisition deal
JetBlue Airways (JBLU) and Spirit Airlines (SAVE) have officially terminated their $3.8 billion merger agreement. JetBlue was seeking to acquire Spirit but could not secure the necessary regulatory approvals to proceed. However, Spirit will receive $69 million in termination fees.
Yahoo Finance's Seana Smith and Bradley Smith break down the details.
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Editor's note: This article was written by Angel Smith
Video Transcript
SEANA SMITH: Let's get to the latest on JetBlue and Spirit. JetBlue abandoning its $3.8 billion deal for Spirit. Now Spirit is going to receive $69 million. That's because of outstanding matters being resolved here. Now this resolution, or this decision, I should say, comes after Carl Icahn obtained those two board seats on JetBlue's board. We are seeing some action here in premarket trading on JetBlue and Spirit.
Brad, not necessarily a massive surprise, given the ruling that we had on this merger here. But again, I think the larger question is what this means for future mergers, not only within the airline space, but maybe some of the regulatory pressure that we could see across the board throughout industries.
BRAD SMITH Yeah, absolutely. Under this agreement, actually, JetBlue is going to have to pay Spirit about $69 million, and the termination, kind of, resolves all outstanding matters related to the transaction. But it's a huge day, and a shock in the system, I think, for some of the ultra-low-cost carriers who were trying to figure out in this consumer environment, more demand for premium, more rebounding corporate travel, which tends to skew back towards that premium part of the broader travel industry and assets that are available there.
What that means for some of the ultra-low-cost carriers that are trying to figure out, both routes schedules. They're trying to figure out exactly what the experience looks like and feels like for those consumers, and the pricing at which too. And so that's something that's going to be interesting to see how JetBlue, Spirit, and even Frontier continue in their go forward strategies, everyone.
