HomeMarket NewsSmall Caps The Spirited Saga: JetBlue Merger Fails, Spirit Airlines Disappointed

The Spirited Saga: JetBlue Merger Fails, Spirit Airlines Disappointed

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The Legal Turbulence

JetBlue Airways Corporation JBLU terminated its $3.8 billion deal to acquire Spirit Airlines Inc. SAVE after a legal blockade by the Department of Justice.

The U.S. District Court for the District of Massachusetts blocked the transaction, citing antitrust laws protecting market competition.

JetBlue will pay Spirit a $69 million termination fee, settling all disputes related to the failed merger.

The Justice Department emphasized the need to protect competitive fares and traveler choices.

Victory for Consumers

The Justice Department hailed the termination as a win for consumer protection. Attorney General Merrick Garland called it a victory for American consumers.

Assistant Attorney General Jonathan Kanter celebrated the decision as a triumph for lower prices and better choices for travelers.

Kanter underscored the potential harm the merger could have caused, had it proceeded, highlighting the importance of consumer voice.

The trial, lasting 17 days from October 2023, saw a coalition of states and the Justice Department arguing against the deal, citing antitrust violations.

JetBlue & Spirit Responses

Despite ambitions to challenge the β€œBig Four” airlines, JetBlue and Spirit will now forge ahead independently.

JetBlue’s CEO, Joanna Geraghty, acknowledged the regulatory hurdles, making it impractical to proceed under the current terms.

Spirit’s CEO, Ted Christie, expressed disappointment over the failed deal but remained optimistic about the airline’s future.

Market Aftermath

JetBlue’s shares surged 4.3% after the announcement, while Spirit’s shares plummeted by almost 11%.

The U.S. Global Jets ETF JETS remained relatively stable for the day, while Frontier Group Holdings Inc. ULCC soared 11% and American Airlines Group Inc. AAL dipped over 4%.

Read now: Super Micro Computer Joins S&P 500 Index: An β€˜AI Winner At Premium Valuation,’ Analyst Says

Photos courtesy of Spirit, JetBlue.

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