Alaska Air Group acquire airliner Virgin America for 2 billion USD in the largest deal in the aviation sindustry since 2013. The acquisition will increase the size of the domestic market of Alaska Air, allowing the company to expand on lucrative markets such as San Francisco and Los Angeles. The acquisition will create a new giant company on the US airline market. Alaska Air will pay 56-58 USD per share for the acquisition of Virgin America, if approved by shareholders and Board of Directors of both companies. Such offer represent a premium of 45% for the shares of the ninth largest US airline by number of transported passengers.
Virgin America was listed on US stock exchange in 2014, as a division of London-based Virgin Group. Established as a low-cost airline, it became famous with the possibility of more intimate lighting, comfortable leather seats and a rich entertainment system during flight. Seattle-based Alaska Air and its regional partners serve more than 100 cities in USA, Canada, Costa Rica and Mexico. The company has a market capitalization of 10.2 billion USD. Virgin America account about 1.5% of domestic flights in USA, while Alaska Air and its subsidiary Horizon Air have market stake of about 5%.
The deal is waiting the approval from the US regulatory service. The regulatory will examine the acquisition for possible overlapping of routes and slots at airports.
The mega-deals in the aviation sector in USA, reduced the sector to four key companies, which control about 80% from the market.