JetBlue has officially announced the termination of its merger agreement with Spirit Airlines. This development follows the U.S. Department of Justice's decision to block the $3.8 billion acquisition, citing it as a violation of existing antitrust laws.
Under the terms of the termination agreement, JetBlue is obliged to pay Spirit $69 million for breaking the merger agreement. According to JetBlue, this termination also resolves all outstanding matters related to the transaction and releases any claims between the companies. Both firms had believed that their merger would be mutually beneficial and not in violation of antitrust laws. However, they acknowledged that obtaining necessary legal approvals by the agreed-upon merger date of July 24, 2024, was unlikely.
Joanna Geraghty, CEO of JetBlue, expressed her thoughts on this development in a press release: "We believed this merger was worth pursuing because it would have unleashed a national low-fare, high-value competitor to the Big Four airlines," she said. "We are proud of the work we did with Spirit to lay out a vision to challenge the status quo, but given the hurdles to closing that remain, we decided together that both airlines’ interests are better served by moving forward independently. We wish the very best going forward to the entire Spirit team." Following this ruling against their proposed merger, Spirit Airlines' stock price has dropped by over half its value while JetBlue's stock has seen an increase of 4.3 percent.
The Justice Department maintains that blocking this merger benefits airline travelers who have been facing higher fares recently. Principal Deputy Assistant Attorney General Doha Mekki from the Justice Department’s Antitrust Division commented on this outcome: "The Court’s decision today reaffirms that the antitrust laws vindicate the economic liberty of the American people," Mekki said. "We are particularly encouraged by the court’s acknowledgement of our role in protecting consumers ‘who otherwise would have no voice’ and the ‘forthrightness, civility, and zealous advocacy’ that ‘assisted the Court in reaching out for justice.’ I am incredibly proud of the Antitrust Division’s staff and our state law enforcement partners whose tireless work ensured another airline merger would not harm American travelers."
