Alaska Air Group (ALK) will buy Hawaiian Holdings (HA), parent of Hawaiian Airlines, for $1.9 billion, including assumed debt, the carriers announced Sunday.
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Alaska Air will pay $18 a share cash. That’s a 270% premium from HA stock’s Friday close of 4.86.
Hawaiian Holdings stock has tumbled 52.6% in 2023, hitting a 12-year low in October.
ALK stock is down 7.5% so far in 2023, though it has surged from the Nov. 1 low of 30.75 to Dec. 1 close of 39.73.
Alaska Air sees $235 million in conservative 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 (JBLU) has an agreement to buy ultra-low-cost Spirit Airlines (SAVE), though the Justice Department is seeking to block that takeover.
Late Friday, S&P Dow Jones Indices announced that Alaska Air will exit the S&P 500 index on Dec. 18, moving down to the S&P SmallCap 600. ALK stock fell modestly Friday night.
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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