Spirit Airlines and Frontier call off a proposed merger

A monthslong effort by Frontier Airlines to acquire Spirit Airlines abruptly ended on Wednesday when the companies called off their proposal, giving new life to a rival bid for Spirit by JetBlue Airways. The announcement came shortly before Spirit was to announce the results of a shareholder vote on Frontier’s acquisition offer. Spirit had repeatedly delayed the vote as it sought to persuade shareholders to support the deal and ignore the allure of the more valuable JetBlue offer. The airline industry consolidated a lot in recent decades, creating four dominant airlines. For Frontier and JetBlue, buying Spirit has represented an opportunity to expand quickly and gain heft to lure business away from American Airlines, Delta Air Lines, Southwest Airlines and United Airlines. But either merger is bound to face legal challenges from the Biden administration’s antitrust regulators, who have pledged to be tougher than their predecessors on mergers that may reduce competition. “While we are disappointed that we had to terminate our proposed merger with Frontier, we are proud of the dedicated work of our team members on the transaction over the past many months,” Ted Christie, Spirit’s chief executive, said in a statement. “Moving forward, the Spirit board of directors will continue our ongoing discussions with JetBlue as we pursue the best path forward for Spirit and our stockholders.” Frontier’s cash-and-stock deal was worth about $2.8b, based on Wednesday’s closing stock price. JetBlue’s all-cash offer is worth $3.6b. Frontier said it was disappointed that Spirit’s shareholders had not rallied behind the deal. The airline, which has aggressively expanded since going public last year, said it was poised for growth, nonetheless. JetBlue said in a statement that it would continue negotiations with Spirit and remained “fully committed to completing this transaction so we can create a compelling national challenger to the dominant airlines.”<br/>