Frontier Group Holdings and Spirit Airlines will merge

Budget carriers Frontier Group Holdings and Spirit Airlines on Feb. 7 unveiled plans to merge in a $2.9 billion deal that would create the fifth-largest U.S. airline and tighten competition against traditional carriers.

Spirit Airlines and Frontier Group Holdings said they have agreed to merge in a cash-and-stock deal valued at $6.6 billion including net debt and operating lease liabilities. Under the terms of the deal, Spirit shareholders will receive 1.9126 Frontier shares plus $2.13 in cash for each share owned, equal to a value of $25.83 per Spirit share at Frontier’s closing stock price on Friday.

Spirit Airlines is an American ultra-low-cost carrier headquartered in Miramar, Florida, in the Miami metropolitan area. Spirit operates scheduled flights throughout the United States and in the Caribbean and Latin America.

Frontier Group Holdings, Inc. is a holding company. The Company operates through its subsidiary Frontier Airlines, is an ultra-low-cost carrier company. Indigo Partners, LLC is an American private equity firm which has a controlling interest in the American Frontier Airlines and Chilean low-cost JetSmart, as well as holding stakes in Mexican budget airline Volaris and European low-cost carrier Wizz Air, while a partnership with Enerjet is planned to launch a new Canadian ultra-low-cost carrier called Lynx Air.

Indigo Partners was co-founded by Bill Franke and has set up a number of ultra-low-cost airlines around the world. It is headquartered in Phoenix, Arizona.