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.
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