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Investors Business Daily
Investors Business Daily
Business
ED CARSON

Alaska Air To Buy Hawaiian Airlines For 270% Premium

Alaska Air Group will buy Hawaiian Airlines for $1.9 billion, including assumed debt, the carriers announced Sunday. ALK stock tumbled Monday while HA stock skyrocketed.

Alaska Air Will Exit S&P 500

Alaska Air will pay $18 a share cash. That's a 270% premium from HA stock's Friday close of 4.86.

Meanwhile, HA stock nearly tripled in Monday trading. Hawaiian Holdings stock is now up 38.6% for 2023, after hitting a 12-year low in October.

ALK stock dived 14%. In addition to Hawaiian Air takeover deal, S&P Dow Jones Indices announced Friday night that Alaska Air will exit the S&P 500 index on Dec. 18, moving down to the S&P SmallCap 600.

ALK stock is now down 20.7% in 2023.

Alaska Air sees $235 million, conservatively, in run-rate synergies. It expects the deal to deliver high-single-digit earnings accretion within the first two years and high teens after that.

The Alaska Air-Hawaiian deal continues an industry consolidation trend. JetBlue Airways has an agreement to buy ultra-low-cost Spirit Airlines, though the Justice Department is seeking to block that takeover.

Please follow Ed Carson on X/Twitter at @IBD_ECarson, Threads at @edcarson1971 and Bluesky at @edcarson.bsky.social for stock market updates and more.

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