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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 travelers visiting San Francisco and Los Angeles
as well as Seattle, where the company is based.
The acquisition will herald the first U.S. commercial airline
merger since US Airways and American Airlines combined in 2013
to form the world's largest carrier.
Alaska's offer of $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 $4 billion, according to the release.
The deal will generate $225 million in annual benefit once the
companies are fully merged, while one-time integration costs are
expected to be between $300 million and $350 million, Alaska Air
said.
(Reporting by Jeffrey Dastin; Additional reporting by Ankit
Ajmera in Bengaluru; Editing by Sriraj Kalluvila and W Simon)
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