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Alaska Air To Buy Virgin America For USD$2.6 Billion

Alaska Air To Buy Virgin America For USD$2.6 Billion

2016 04 04

2016 04 04

Alaska Air has agreed to buy Virgin America for USD$2.6 billion to expand its operation on the US West Coast.

Alaska Air said in a news release that the merged airline will become the fifth largest in the United States and will help it compete against larger rivals for lucrative business and international passengers visiting San Francisco and Los Angeles as well as Seattle, where the company is based.

Alaska's offer of USD$57 per share in cash represents a premium of about 47 percent to Virgin's Friday's close. Including Virgin America's debt and aircraft lease obligations, the transaction value amounts to about USD$4 billion, according to the release.

The deal will generate USD$225 million in annual benefit once the companies are fully merged, while one-time integration costs are expected to be between USD$300 million and USD$350 million, Alaska Air said.

(Reuters)

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