Allegiant Signs $1.5B Cash-and-Stock Deal to Purchase Sun Country

Core Insights - Allegiant Travel Company (ALGT) is set to acquire Sun Country Airlines (SNCY) in a cash and stock transaction valued at approximately $1.5 billion, translating to an implied value of $18.89 per share for Sun Country [1][10] - The acquisition is expected to enhance Allegiant's earnings per share (EPS) one year post-deal closure, with anticipated annual synergies of $140 million within three years [4][10] Deal Structure - Sun Country shareholders will receive 0.1557 shares of ALGT common stock and $4.10 in cash for each share owned, representing a 19.8% premium over Sun Country's closing price of $15.77 on January 9, 2026 [2] - Upon completion, Allegiant shareholders will own approximately 67% of the combined entity, while Sun Country shareholders will hold the remaining 33% [2] Regulatory and Approval Process - The merger has received unanimous approval from the boards of both companies and is subject to U.S. federal antitrust clearance, shareholder approval, and other customary closing conditions, with an expected completion in the second half of 2026 [3] Financial and Operational Benefits - The merger is projected to create a financially robust entity with a net adjusted debt to EBITDAR ratio of less than 3.0x post-closure [5] - The combined airline will operate over 650 routes, including 551 from Allegiant and 105 from Sun Country, expanding access to 18 international destinations [7][10] Fleet and Efficiency - The merged company will utilize Allegiant's 737 MAX fleet, improving fuel efficiency and capacity, with a total of nearly 195 aircraft in operation, including 30 on order and 80 options [8][10] Leadership and Integration - Allegiant's CEO, Gregory C. Anderson, will lead the combined company, with Sun Country's CEO, Jude Bricker, serving as an advisor to ensure smooth integration [13] - Both companies will collaborate closely with employees and unions to facilitate a seamless transition, maintaining existing collective bargaining agreements [14] Headquarters and Presence - The combined company will be headquartered in Las Vegas while maintaining a significant presence in Minneapolis-St. Paul, where Sun Country is based [15]