Alaska Air Group Inc. announced a deal Sunday to buy Hawaiian Airlines for about $1.9 billion.
Under the deal, Alaska Air will pay $18 a share in cash, while taking on about $900 million in Hawaiian’s net debt, for a total equity value of roughly $1 billion.
In a statement, Alaska said the deal will grow the country’s fifth-largest airline to a combined fleet of 365 airplanes with 138 destination cities, with a combined 54.7 million annual passengers. The airline said Honolulu will become a key hub, with expanded service between Hawaii and the mainland U.S., and create new connections for flights to and from Asia.
Both brands will be retained, with the combined company’s headquarters based in Seattle. Alaska said the two airlines shares complimentary domestic, international and cargo networks.
Alaska said it will maintain a strong presence in Hawaii, including expanding union-represented jobs and local investments.
“This combination is an exciting next step in our collective journey to provide a better travel experience for our guests and expand options for West Coast and Hawaii travelers,” Alaska Airlines Chief Executive Ben Minicucci said in a statement.
The boards of both companies have approved the acquisition, which is still pending regulatory approval and approval from Hawaiian’s shareholders. Alaska said the deal is expected to close in the next 12-18 months.
The move is the latest consolidation in the airline industry. JetBlue Airways
JBLU,
is currently in the process of buying budget carrier Spirit Airlines
SAVE,
for $3.8 billion, a deal that the Justice Department is opposing on antitrust grounds.
Alaska Air shares
ALK,
are down about 7% year to date, while Hawaiian stock
HA,
has sunk 53% in 2023.
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