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Frontier Group Holdings Inc. agreed to buy Spirit Airlines Inc. for $2.9 billion in cash and stock in a deal that would create a discount-airline juggernaut.
Ultralow-cost airlines, designed around cutting costs and fares by offering a more basic flying experience, have upended the airline industry in recent years. The deal unveiled Monday would bring together two of the biggest such airlines, which the carriers said would create the fifth-largest U.S. airline and allow them to compete more aggressively against larger rivals.
The companies valued the deal at $6.6 billion, including the assumption of net debt and operating leases.
Upon the deal’s close, Frontier will own about 51.5% of the combined company, and its chairman, William Franke, will become chair of the combined company’s board. Shares of Spirit rose 13% after the deal was announced, while Frontier stock wavered between gains and losses.
