Allegiant to acquire Sun Country Airlines in $1.5 billion deal

Allegiant Travel said on Sunday that it plans to buy Sun Country Airlines in a $1.5 billion deal, combining the two small, budget carriers. The transaction, which Allegiant said will be paid for with stock and cash and includes $400 million of Sun Country’s debt, comes as low-cost carriers have struggled with high costs and competition.

Sun Country shareholders would receive a nearly 20 percent premium for their shares, based on the airlines’ stock prices as of Friday. "This combination is an exciting next chapter in Allegiant and Sun Country’s shared mission in providing affordable, reliable, and convenient service from underserved communities to premier leisure destinations," Gregory C.

Anderson, Allegiant’s chief executive, said in a statement. The companies said they expect to serve almost 175 cities in the U.S. and nearby countries and to operate more than 650 routes with about 195 aircraft. The combined company will be headquartered in Las Vegas and will maintain "a significant presence" in Minneapolis-St.

Paul. Allegiant shareholders are expected to own about two-thirds of the combined company, with the remaining third owned by Sun Country shareholders. The airlines said they expect to complete the transaction in the second half of this year, but the deal is subject to regulatory approval.

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Business, Allegiant Travel, Sun Country Airlines, Las Vegas, Minneapolis-st. Paul, Gregory C. Anderson