Changes in US stocks | Merger negotiations with Spirit Aviation Holdings restarted, Frontier Group (ULCC.US) rose more than 7.5%

The Zhitong Finance App learned that on Wednesday, Frontier Group (ULCC.US) rose more than 7.5%, merger negotiations between Spirit Aviation Holdings and the company have resumed, and related transactions may be announced as early as the end of this year.

Although the two parties have tried to merge twice in the past but were unsuccessful, the market believes that the integration logic between Spirit and Frontier is still clear. As the two major ultra-low-cost carriers in the US, if successfully merged, it is expected to create an airline operator with a larger advantage in the leisure aviation market. By improving the efficiency of fleet and route utilization, and obtaining stronger cost bargaining power in fuel, maintenance, and distribution, etc., it is possible to improve overall profitability.

For Frontier, the acquisition of Spirit's narrow-body Airbus fleet and its route network at a relatively low valuation is seen as an important opportunity to accelerate the company's expansion. Spirit's current asset situation is considered by the market to be in the “difficult valuation” range, which also provides a more attractive entry point for potential acquirers.

Investors are also concerned about whether JetBlue (JBLU.US) will respond to this. JetBlue launched a hostile takeover of Spirit in 2022, but was ultimately rejected by a US federal judge due to antitrust issues, and the deal failed.