Allegiant Travel Company (ALGT) M&A Announcement summary

Deal rationale and strategic fit

• The merger combines two complementary, leisure-focused airlines with flexible capacity, industry-leading margins, and diversified business models, creating a leading player in North America serving 22 million annual customers across nearly 175 cities and more than 650 routes.

• The combination expands reach across 94% of originating markets, accelerates growth into new domestic and international destinations, and leverages complementary networks.

• Diversified operations include scheduled service, charter, cargo, and third-party travel business, providing stability and resilience.

• Shared commitment to affordable, reliable service from underserved communities to premier leisure destinations, with enhanced loyalty programs and customer relevance.

• The merger aims to expand opportunities for travelers, employees, and shareholders, while maintaining cultural alignment and operational philosophies.

Financial terms and conditions

• The transaction values Sun Country at $1.5 billion, including $400 million of net debt, with an implied value of $18.89 per share—a 19.8% premium over the prior closing price.

• Sun Country shareholders receive 0.1557 Allegiant shares plus $4.10 in cash per share; Allegiant shareholders will own 67% and Sun Country shareholders 33% of the combined company.

• The deal is structured as a cash and stock transaction, with closing expected in the second half of 2026, subject to regulatory and shareholder approvals.

Synergies and expected cost savings

• The merger is projected to generate $140 million in annual EBITDA synergies within three years post-close, driven by network optimization, scale efficiencies, and procurement.

• Key synergy drivers include network and scheduling optimization, expanded Midwest presence, enhanced loyalty program, charter and cargo efficiencies, and fleet flexibility.

• Revenue synergies can begin post-close, with up to half achievable in the first year.

• One-time integration costs are estimated at $150–$200 million.