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Spirit Airlines will assess JetBlue’s takeover offer against its proposed merger with Frontier.

Spirit Airlines said on Thursday it would enter talks with JetBlue Airways over an offer to merge the two companies, a deal that threatens to spoil Spirit’s plans to merge with Frontier Airlines.

In a statement, Spirit said it consulted with outside financial and legal advisers and determined that JetBlue’s offer could “reasonably” exceed the cash and stock deal to merge with Frontier that those two companies announced in February. JetBlue’s surprise offer announced this week surpassed Frontier’s initial offer.

“Spirit intends to enter into discussions with JetBlue regarding JetBlue’s proposal, pursuant to the terms of the company’s merger agreement with Frontier,” the airline said in a statement.

Spirit noted Thursday that its board did not consider JetBlue’s proposal better than the Frontier merger and said the board’s earlier recommendation that shareholders adopt that merger still stands.

JetBlue’s Tuesday offer of about $3.6 billion in cash initially baffled some analysts who questioned the airline’s assumptions about how easily it could subsume Spirit. The value of Frontier’s offer fluctuated with its share price, but was worth about a third less than JetBlue’s offer using Monday’s share price.

JetBlue and Frontier said a merger with Spirit would allow them to better compete with the country’s four dominant airlines, which control about two-thirds of the domestic market.

The Frontier merger is widely seen by analysts as simpler, combining two budget carriers with strengths on opposite coasts. The JetBlue deal isn’t as clear cut, though some analysts see merit in the airline’s purchase of Spirit to accelerate growth plans that would otherwise be difficult to achieve.


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