- Allegiant will acquire Sun Country in a ~$1.5B cash-and-stock deal expected to close in 2H 2026, with Allegiant as the public parent led by CEO Gregory Anderson.
- Sun Country is valued at $18.89 per share (incl. ~$400M net debt), paying 0.1557 Allegiant shares plus $4.10 cash for a ~19.8% premium.
- The combined leisure carrier would serve ~22M passengers with ~195 aircraft across 650+ routes in nearly 175 cities, targeting $140M annual synergies by year three and EPS accretion in year one.
- Minimal route overlap could ease antitrust review, and the airlines will operate separately until a single FAA operating certificate is obtained.
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This merger unites two profitable U.S. carriers whose route systems largely avoid overlap—Allegiant’s focused on small- and mid-sized domestic cities, Sun Country’s on larger locales with established international and cargo operations—offering greater scale without the integration drag often seen in airline mergers.
Financially, the deal strikes a balance: the 19.8% premium gives Sun Country shareholders near-term upside; Allegiant will own ~67% of the combined entity and assume control, enhancing its market breadth and profitability, while postponing major costs until post-close integration. The expected $140 million in yearly synergies by year three is realistic given complementary networks, fleet optimization, and procurement efficiencies.
Cargo and charter revenue—especially Sun Country’s Amazon Air freighter business—is a critical stabilizer for seasonality, offering Allegiant an avenue to dampen cyclical downturns in leisure travel.
On the regulatory front, the near-zero overlap between Allegiant and Sun Country routes (with only 1-2 minor overlaps in summer schedules) likely reduces objections from the Department of Justice and FAA. However, scrutiny may focus on Allegiant’s leverage (expected Net Adjusted Debt / EBITDAR below 3.0×) and proposed headquarter and brand consolidation, plus maintaining legacy brands and contracts during transition.
Strategic risks include successfully integrating distinct operational and fleet systems (Airbus + Boeing models), preserving Sun Country’s brand equity and cargo/charter functions until full integration, and ensuring projected synergies and EPS gains are not delayed by regulatory friction, labor issues, or cost overruns. On the upside, the merged entity is well-positioned to threaten lower-end competitors like Spirit or Frontier, particularly in leisure origination markets, and to benefit from inflation and fuel pressures via scale and contract leverage.
Supporting Notes
- merger value: ~$1.5 billion including ~$0.4 billion net debt; per-share deal: 0.1557 Allegiant shares + $4.10 cash per Sun Country share.
- premium: 19.8% over Sun Country’s Jan 9, 2026 closing price of $15.77; implied share price: $18.89.
- ownership structure post-close: Allegiant ~67%, Sun Country ~33% on fully diluted basis.
- combined fleet and network: ~195 aircraft; more than 650 routes across nearly 175 cities.
- international reach: 18 destinations in Mexico, Central America, Canada, and the Caribbean via Sun Country’s existing network.
- cargo business: Sun Country has Amazon Prime Air contract, increasing freighter fleet (up to ~20 B-737-800 freighters); CVG base opening Jan 31, 2026.
- synergies & financial targets: $140 million annual synergies by year three; EPS accretive in year one; maintain Net Adjusted Debt / EBITDAR < 3.0× at close.
- leadership: Gregory Anderson (Allegiant CEO) will lead combined company; Robert Neal as President & CFO; Jude Bricker (Sun Country CEO) to join Board; Allegiant headquartered in Las Vegas, significant presence preserved in Minneapolis–St. Paul.
- regulatory status: approved by both boards; needs U.S. federal antitrust and shareholder approvals; operations separate until single FAA operating certificate.
- network overlap is minimal: only 1–2 routes overlap presently or in planning, simplifying regulatory assessment.