LONDON – Another challenge has arisen in the JetBlue-Spirit Airlines merger as the U.S. Justice Department seeks to block the deal, with threats of lawsuits.
Based on the report from POLITICO, it is understood a challenge could be made as early as next month as part of U.S. President Joe Biden’s anti-monopoly stance.
The U.S. media outlet also mentioned that one of their sources highlighted the fact that the Justice Department wants to expand the team investigating the JetBlue-Spirit merger.
Geraghty at JetBlue Isn’t Happy…
Joanna Geraghty, JetBlue’s President & COO, expressed unhappiness via an interview with the global media outlet Reuters:
“This isn’t Pepsi and Coke merging”.
Relating back to the POLITICO article, the JetBlue spokesperson at the time stated that this merger between JetBlue and Spirit will create a “long overdue national low-fare challenger”.
Geraghty believes that a lawsuit can still be avoided and that they can get the merger through to the other side.
The JetBlue-Spirit Merger…
Back in July, Spirit Airlines announced the termination of its potential merger with Frontier Airlines.
Ted Christie, CEO of Spirit Airlines, had this to say on the termination:
“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”.
“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.”
By the end of the month, the airline announced that it will merge with JetBlue, crushing Frontier for the last time.
This brings an overall end to the dramatic saga that we have seen over the last few weeks, and the valuation of the merger will be $33.50 per share in cash.
“We are excited to deliver this compelling combination that turbocharges our strategic growth, enabling JetBlue to bring our unique blend of low fares and exceptional service to more customers, on more routes,” said Robin Hayes, chief executive officer, of JetBlue.
Then, by October, Spirit’s stockholders approved its merger with JetBlue.
Ted Christie, President and CEO of Spirit Airlines, said, “This is an important step forward on our path to closing a combination that will create the most compelling national low-fare challenger to the dominant U.S. carriers.”
“We look forward to continuing our ongoing discussions with regulators as we work toward completing the transaction and delivering value to Team Members, Guests, and stockholders.”
The completion of the transaction is subject to customary closing conditions, including receipt of required regulatory approvals. Spirit and JetBlue expect to conclude the regulatory process and close the transaction no later than the first half of 2024.
Overall…
The next few months are going to be interesting for the JetBlue-Spirit merger. All eyes will be on both carriers to get this through the DOJ.
It will also be a big test of how strong Biden’s anti-monopoly stance will be, or whether this will be a repeat of the American-US Airways merger, where a settlement was made to push the merger through.
Either way, it’s going to be interesting to watch!
