ALASKA AIR GROUP, INC. acquires Virgin America Inc.

ALASKA AIR GROUP, INC. acquired Virgin America Inc. for $57.00 per share in cash; aggregate transaction value of approximately $4.0 billion including existing Virgin America indebtedness and capitalized aircraft operating leases (equity value approximately $2.6 billion), a transaction completed in December 2016, structured as all cash.

Virgin America Inc. operates in Passenger airlines - West Coast / California network, is based in Burlingame / San Francisco, California. Virgin America Inc. (NASDAQ: VA) was a California-based airline known for outstanding customer service and low fares, with a strong foundation in California markets including San Francisco and Los Angeles. The combination created the fifth-largest U.S. airline with a fuel-efficient fleet of 286 aircraft, nearly 1,200 daily flights to 118 destinations, and the most West Coast hubs of any airline.

Alaska stated the combination expands Alaska Airlines' existing footprint in California, bolsters its platform for growth and strengthens the company as a competitor to the four largest U.S. airlines that control roughly 84 percent of the domestic market; the deal was expected to be accretive to adjusted earnings per share in the first full year, increase annual revenues 27 percent to more than $7 billion, and deliver $225 million in total net annual synergies at full integration.

Strong California foundation (San Francisco and Los Angeles), access to slot-controlled airports including Reagan National, JFK and LaGuardia, and a young fuel-efficient fleet that complemented Alaska's Pacific Northwest core, making the combined carrier the go-to airline for the more than 175,000 daily fliers in and out of California airports. $225 million in total net annual synergies expected at full integration; expected to be accretive to adjusted EPS in the first full year and to increase annual revenues 27 percent to more than $7 billion. Virgin America merged with Alaska Airlines; the airlines worked toward a single FAA operating certificate, with regional sister carrier Horizon Air remaining on its own separate operating certificate. Alaska Air Group closing press release (Dec. 14, 2016): the combination created the fifth-largest U.S. airline with nearly 1,200 daily flights to 118 destinations across the U.S., Mexico, Canada, Costa Rica and Cuba, a fleet of 286 aircraft averaging 8.1 years of age, more than $7 billion in annual revenues, and hubs in Seattle, Portland, Anchorage, San Francisco and Los Angeles.