Allegiant to buy rival budget airline Sun Country in $1.5 billion cash and stock deal
An Allegiant Airlines jet flies out of Las Vegas Airport.
Nick Potts | Getty Images
Allegiant Travel said Sunday it is acquiring fellow leisure carrier Sun Country in a $1.5 billion cash and stock deal, a plan that comes as budget airlines in the U.S. have faced a surge in costs following the pandemic and the increase in domestic capacity.
The transaction has an implied value of $18.89 for each Sun Country share. That carrier’s shareholders will receive 0.1557 shares of Allegiant common stock and $4.10 in cash for each Sun Country share owned, Allegiant said Sunday.
The deal is a premium of almost 20% over Sun Country’s closing stock price of $15.77 on Friday, the airline said.
Allegiant Travel Co, Sun Country Airlines and the NYSE Arca Airline index
The deal will test the Trump administration’s appetite for an airline merger.
In an interview with CNBC, Allegiant Air CEO Greg Anderson expressed confidence that the deal would be approved, noting that the two carriers have little network overlap. Allegiant approached Sun Country in late fall, he said, adding that Sun Country’s contracted flying for Amazon is set to continue.
The Biden administration challenged JetBlue Airways’ acquisition of Spirit Airlines, which is now in its second bankruptcy in less than a year and fighting for survival. A federal judge sided with the Biden Justice Department and blocked the JetBlue-Spirit on antitrust grounds deal two years ago.
The Biden administration, however, did clear Alaska Air’s nearly $2 billion acquisition of Hawaiian Airlines in 2024.
The carriers’ executives will hold a special conference call on Monday at 8:30 a.m. ET to discuss the deal.
