Allegiant Travel announced plans to acquire Sun Country in a cash-and-stock deal valued at $1.5 billion, offering a 19.8% premium to Sun Country’s closing price. The merger will create a combined company with $1.1 billion in equity value and $140 million in annual synergies expected three years after closing.

Sun Country shareholders will receive 0.1557 shares of Allegiant stock and $4.10 in cash per share. The combined company will operate under the Allegiant name, based in Las Vegas with a significant presence in Minnesota. Management anticipates maintaining strong liquidity and financial flexibility post-integration.

The deal is expected to be EPS accretive in the first full year post-closing, with synergies driving increased accretion over time. Fleet growth will be conservative, with a focus on optimizing schedules and expanding Midwest relevance. The combined company’s pro forma CapEx profile is not expected to change significantly in 2026.

The integration process is projected to take about 14 months, with synergies expected to start before achieving a single operating certificate. Allegiant remains in mediation with its pilots, and an integration office has been established to manage risks. Both airlines use Navitaire, which should ease technology-integration concerns.

Executives emphasized the importance of Sun Country’s cargo operations and its strategic hub at MSP. Allegiant and Sun Country leadership met with Amazon to expand cargo fleet operations. MSP is seen as a key synergy opportunity, with plans to optimize gate availability and increase revenue by filling midday lulls with aircraft.

Read more at Yahoo Finance: Allegiant Travel to Buy Sun Country in $1.5B Deal, Offering 19.8% Premium and $140M Synergies