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Allegiant Signs $1.5B Cash-and-Stock Deal to Purchase Sun Country
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Key Takeaways
Sun Country agreed to be acquired in a $1.5B cash-and-stock transaction valued at $18.89 per share.
ALGT expects the merger to be EPS accretive after year one and to deliver $140M in annual synergies.
Allegiant will run 650 routes, add access to 18 international destinations, and operate nearly 195 aircraft.
Allegiant Travel Company(ALGT - Free Report) is all set for its notable imprint in the airline industry with its latest merger news. Allegiant has inked a deal with Sun Country Airlines (SNCY - Free Report) ), per which Allegiant will purchase Sun Country in a cash and stock transaction at an implied value of $18.89 per Sun Country share. The deal value is estimated to be around $1.5 billion, which includes $0.4 billion of Sun Country's net debt.
Sun Country shareholders will receive 0.1557 shares of ALGT common shares and $4.10 in cash for each Sun Country share owned. This marks a premium of 19.8% over Sun Country's closing share price of $15.77 on Jan. 9, 2026, and 18.8% based on the 30-day volume-weighted average price. On completion, Allegiant shareholders are expected to own about 67% of the combined company on a fully diluted basis, with Sun Country shareholders holding the remaining 33%.
The deal has already received unanimous approval by the board of directors of both companies. Subject to the receipt of U.S. federal antitrust clearance and other required regulatory approvals, the approval of both companies' shareholders and other customary closing conditions, the deal is anticipated to be completed in the second half of 2026.
While Allegiant currently carries a Zacks Rank #3 (Hold), Sun Country carries a Zacks Rank #4 (Sell).
Merger Benefits
The acquisition is anticipated to be accretive to earnings per share one year post-deal closure, while enhancing long-term financial results. Allegiant anticipates to gain $140 million in annual synergies within three years, post the deal closure and integration. Expected cost savings and revenue synergies are also anticipated to come from scale efficiencies, fleet optimization, and procurement.
The merger is likely to witness the union of two profitable airlines with solid balance sheets. The merged entity anticipates net adjusted debt to Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent/Restructuring costs (EBITDAR) of less than 3.0x following closure of the deal.
The combined airline's diversified revenue streams, which include its high ancillary revenues and long-term contracts in cargo and charter, are anticipated to offer more strength during economic cycles.
The merged body is expected to generate a leisure-focused U.S. airline, widening service to more popular vacation destinations across the United States and internationally, while providing more travelers with access to pocket-friendly air travel.
The combined entity will lead to more than 650 routes, which include 551 Allegiant routes and 105 Sun Country routes. With access to Sun Country’s extensive international network across Mexico, Central America, Canada, and the Caribbean, the combined airline will provide Allegiant customers with expanded service from its small and mid-sized cities to 18 international destinations.
The combined company is expected to fully utilize Allegiant's 737 MAX fleet and order book, improving fuel efficiency and capacity. On completion, the combined airline will operate almost 195 aircraft, with 30 on order and an additional 80 options.
Further, the combined company is likely to generate newroles, more job opportunities and cross-training possibilities.
Impact on Company Leadership & Operations Post Deal Closure
On completion of the merger, Allegiant will continue to be the publicly held parent company, and the combined company will continue under the Allegiant name. However, until the airline operations receive a single operating certificate from the Federal Aviation Administration, which combines the airlines' operations, procedures, and safety protocols into one framework, each airline will operate separately.
There will be no immediate impact on ticketing, flight schedules, travel experience, or the Sun Country brand.
Allegiant chief executive officer (CEO), Gregory C. Anderson, will operate as the CEO of the combined company, and Robert Neal will operate as the president and chief financial officer. Sun Country president and CEO, Jude Bricker, along with two additional Sun Country board members, will join Allegiant’s board of directors, thereby increasing the size of the Allegiant board to 11. Maury Gallagher, chairman of Allegiant’s board, will operate as chairman of the board of the combined company. Jude Bricker will serve as an advisor to Mr. Anderson to assist in a smooth and successful integration.
Both companies will work closely with employees and their unions (which include pilots, flight attendants, mechanics, ground staff, and dispatchers), for a smooth integration process. Existing collective bargaining agreements will remain in effect, and the companies will follow all processes required under the Railway Labor Act. Both companies share a goal to support employees throughout the transition, creating a unified team for the future.
The combined company will be headquartered in Las Vegas and will maintain a solid presence in Minneapolis-St. Paul, where Sun Country is based.
Stocks to Consider
Investors interested in the Transportation sector may also consider LATAM Airlines Group (LTM - Free Report) and Expeditors International of Washington, Inc. (EXPD - Free Report) .
LTM has an expected earnings growth rate of 52.63% for the current year. The company has a solid earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, and met in the remaining one, delivering an average beat of 29.84%. The Zacks Consensus Estimate for LTM’s 2025 earnings has moved 5.34% north in the past 60 days. LTM shares gained 32.5% in the past six months.
EXPD presently carries a Zacks Rank #2 (Buy). Expeditors has an expected earnings growth rate of 3.50% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 13.94%. The Zacks Consensus Estimate for EXPD’s 2025 earnings has moved 7.63% north in the past 60 days. Shares of Expeditors have gained 30.7% over the past six months.
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Allegiant Signs $1.5B Cash-and-Stock Deal to Purchase Sun Country
Key Takeaways
Allegiant Travel Company(ALGT - Free Report) is all set for its notable imprint in the airline industry with its latest merger news. Allegiant has inked a deal with Sun Country Airlines (SNCY - Free Report) ), per which Allegiant will purchase Sun Country in a cash and stock transaction at an implied value of $18.89 per Sun Country share. The deal value is estimated to be around $1.5 billion, which includes $0.4 billion of Sun Country's net debt.
Sun Country shareholders will receive 0.1557 shares of ALGT common shares and $4.10 in cash for each Sun Country share owned. This marks a premium of 19.8% over Sun Country's closing share price of $15.77 on Jan. 9, 2026, and 18.8% based on the 30-day volume-weighted average price. On completion, Allegiant shareholders are expected to own about 67% of the combined company on a fully diluted basis, with Sun Country shareholders holding the remaining 33%.
The deal has already received unanimous approval by the board of directors of both companies. Subject to the receipt of U.S. federal antitrust clearance and other required regulatory approvals, the approval of both companies' shareholders and other customary closing conditions, the deal is anticipated to be completed in the second half of 2026.
While Allegiant currently carries a Zacks Rank #3 (Hold), Sun Country carries a Zacks Rank #4 (Sell).
Merger Benefits
The acquisition is anticipated to be accretive to earnings per share one year post-deal closure, while enhancing long-term financial results. Allegiant anticipates to gain $140 million in annual synergies within three years, post the deal closure and integration. Expected cost savings and revenue synergies are also anticipated to come from scale efficiencies, fleet optimization, and procurement.
The merger is likely to witness the union of two profitable airlines with solid balance sheets. The merged entity anticipates net adjusted debt to Earnings Before Interest, Taxes, Depreciation, Amortization, and Rent/Restructuring costs (EBITDAR) of less than 3.0x following closure of the deal.
The combined airline's diversified revenue streams, which include its high ancillary revenues and long-term contracts in cargo and charter, are anticipated to offer more strength during economic cycles.
The merged body is expected to generate a leisure-focused U.S. airline, widening service to more popular vacation destinations across the United States and internationally, while providing more travelers with access to pocket-friendly air travel.
The combined entity will lead to more than 650 routes, which include 551 Allegiant routes and 105 Sun Country routes. With access to Sun Country’s extensive international network across Mexico, Central America, Canada, and the Caribbean, the combined airline will provide Allegiant customers with expanded service from its small and mid-sized cities to 18 international destinations.
The combined company is expected to fully utilize Allegiant's 737 MAX fleet and order book, improving fuel efficiency and capacity. On completion, the combined airline will operate almost 195 aircraft, with 30 on order and an additional 80 options.
Further, the combined company is likely to generate newroles, more job opportunities and cross-training possibilities.
Impact on Company Leadership & Operations Post Deal Closure
On completion of the merger, Allegiant will continue to be the publicly held parent company, and the combined company will continue under the Allegiant name. However, until the airline operations receive a single operating certificate from the Federal Aviation Administration, which combines the airlines' operations, procedures, and safety protocols into one framework, each airline will operate separately.
There will be no immediate impact on ticketing, flight schedules, travel experience, or the Sun Country brand.
Allegiant chief executive officer (CEO), Gregory C. Anderson, will operate as the CEO of the combined company, and Robert Neal will operate as the president and chief financial officer. Sun Country president and CEO, Jude Bricker, along with two additional Sun Country board members, will join Allegiant’s board of directors, thereby increasing the size of the Allegiant board to 11. Maury Gallagher, chairman of Allegiant’s board, will operate as chairman of the board of the combined company. Jude Bricker will serve as an advisor to Mr. Anderson to assist in a smooth and successful integration.
Both companies will work closely with employees and their unions (which include pilots, flight attendants, mechanics, ground staff, and dispatchers), for a smooth integration process. Existing collective bargaining agreements will remain in effect, and the companies will follow all processes required under the Railway Labor Act. Both companies share a goal to support employees throughout the transition, creating a unified team for the future.
The combined company will be headquartered in Las Vegas and will maintain a solid presence in Minneapolis-St. Paul, where Sun Country is based.
Stocks to Consider
Investors interested in the Transportation sector may also consider LATAM Airlines Group (LTM - Free Report) and Expeditors International of Washington, Inc. (EXPD - Free Report) .
LTM presently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
LTM has an expected earnings growth rate of 52.63% for the current year. The company has a solid earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in three of the trailing four quarters, and met in the remaining one, delivering an average beat of 29.84%. The Zacks Consensus Estimate for LTM’s 2025 earnings has moved 5.34% north in the past 60 days. LTM shares gained 32.5% in the past six months.
EXPD presently carries a Zacks Rank #2 (Buy). Expeditors has an expected earnings growth rate of 3.50% for the current year. The company has an encouraging earnings surprise history. Its earnings outpaced the Zacks Consensus Estimate in each of the trailing four quarters, delivering an average beat of 13.94%. The Zacks Consensus Estimate for EXPD’s 2025 earnings has moved 7.63% north in the past 60 days. Shares of Expeditors have gained 30.7% over the past six months.