JetBlue Airways announced $3.8 billion deal to purchase Spirit Airlines

JetBlue Airways announced $3.8 billion deal to purchase Spirit Airlines

JetBlue has agreed to buy Spirit Airlines for $3.8 billion in a deal that would create the nation's fifth largest airline if approved by U.S. regulators

JetBlue CEO Robin Hayes said the deal will be fruitful for both the investors and passengers

The announcement comes a day after the deal to merge Spirit Airlines with Frontier didn't work out

JetBlue Airways confirmed that it would pay $33.50 per share in cash for Spirit, including a prepayment of $2.50 per share in cash payable once Spirit stockholders approve the transaction

Spirit Airlines CEO Ted Christie said "We are thrilled to unite with JetBlue through our improved agreement to create the most compelling national low-fare challenger to the dominant U.S. carriers"

Spirit Airlies will have to pay Frontier $25 million to cover costs Frontier incurred during merger discussions

After the deal news broke, shares of Spirit Airlines were up 4% in premarket trading on the news, while JetBlue shares gained 1%

As per the market research, it is expected that the airlines fare might surge and go up after this mearge deal between JetBlue Airways and Spirit Airlines

JetBlue will pay Spirit shareholders an additional 10 cents a month for any delay in closing after December of this year, which could raise the price to $34.15 a share

The combined airline would have a fleet of 458 aircrafts. The airlines will continue to operate independently until after the transaction closes