Sun Country Airlines (SNCY) M&A Announcement summary

Deal rationale and strategic fit

• The merger creates a leading flexible capacity leisure airline in North America, serving 22 million annual customers across nearly 175 cities and more than 650 routes.

• Combines two carriers with complementary networks, diversified business lines, and industry-leading margins, accelerating growth into new domestic and international markets.

• Leverages strengths in charter, cargo, and loyalty programs, supporting stable revenue streams and operational resilience.

• Shared commitment to affordable, reliable service from underserved communities to premier leisure destinations.

• The timing reflects both companies' operational and financial readiness and strategic alignment.

Financial terms and conditions

• The transaction values Sun Country at $1.5 billion, including $400 million in net debt, with Sun Country shareholders receiving $4.10 in cash and 0.1557 Allegiant shares per share, totaling $18.89 per share, a 19.8% premium.

• Allegiant shareholders will own 67% and Sun Country shareholders 33% of the combined company.

• The deal is expected to be earnings accretive in the first full year post-closing, with mid-single-digit accretion.

• Pro forma adjusted net debt to EBITDA is expected to remain below three times.

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

Synergies and expected cost savings

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

• Key drivers include network and scheduling optimization, expanded Midwest presence, improved cobrand economics, and enhanced loyalty platform utility.

• Additional upside potential exists from fleet management, ancillary optimization, and cargo efficiencies.

• Some synergies, especially revenue-related, can be realized in the first year post-close.

• Labor-related dissynergies are included in the synergy estimate, mainly expected in the latter half of the three-year period.