JetBlue Airways and Spirit Airlines cancels their merger after a U.S. judge blocked the deal in January on anti-competition concerns.
The decision comes in the wake of a federal court ruling blocking the deal from taking place on antitrust grounds. The Justice Department had argued that airfares could go up if Spirit was no longer an independent airline.
A successful deal would have created the fifth-largest carrier in the United States and helped Spirit ensure its survival. But William Young, the U.S. district judge in Boston ruled the deal would harm consumers by reducing competition.
JetBlue won the bidding war for Spirit in the summer of 2022. Earlier that year, Spirit had a deal to be sold to a different suitor — Frontier Airlines. But JetBlue came in and kept upping its offer, eventually willing to pay $3.8 billion for Spirit. The two companies gave themselves two years to get the deal done.
“Given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently,” said JetBlue CEO Joanna Geraghty.
“We are disappointed we cannot move forward with a deal,” Spirit CEO Ted Christie said. “However, we remain confident in our future as a successful independent airline.”
JetBlue will pay Spirit $69 million to break up the deal. Spirit already had received $425 million in prepayments. JetBlue had agreed to pay $33.50 per share for Spirit. At the time of the original deal, Spirit stock was almost $25 a share. It traded below $6 on Monday as news of the merger termination was released.
The decision could spark a new bidding war for Spirit. There is even the possibility that it could lead to a bankruptcy filing and liquidation for Spirit as the airline has not reported a quarterly profit since before the COVID-19 pandemic.
