Sun Country Airlines (SNCY) M&A Announcement summary

Deal rationale and strategic fit

• The merger creates a leading flexible leisure carrier in North America, combining complementary networks, business models, and diversified business lines, with a focus on leisure travelers and industry-leading margins.

• The combination accelerates growth into new domestic and international markets, expands network reach, and enhances customer value, especially in the Minneapolis-St. Paul hub.

• Both companies share similar cultures, operating philosophies, and a commitment to affordable, reliable service from underserved communities to premier leisure destinations, supporting smooth integration.

• Diversified operations, including scheduled service, charter, and cargo, provide stable revenue streams and operational resilience.

• Expanded loyalty programs and customer-centric focus are expected to enhance customer relevance and value.

Financial terms and conditions

• The transaction values Sun Country at $1.5 billion, including $400 million of net debt, with an implied value of $18.89 per share, a 19.8% premium over the prior closing price.

• Sun Country shareholders will receive 0.1557 shares of Allegiant stock plus $4.10 in cash per share, resulting in Allegiant shareholders owning 67% and Sun Country shareholders 33% of the combined company.

• The deal is expected to be accretive to EPS in the first full year post-closing and to increase return on capital and free cash flow.

• Closing is expected in the second half of 2026, subject to regulatory and shareholder approvals.

• One-time integration costs are estimated at $150–$200 million.

Synergies and expected cost savings

• The merger is projected to generate $140 million in annual EBITDA synergies within three years post-close, driven by network expansion, scale efficiencies, and procurement.

• Key synergy drivers include network and scheduling optimization, expanded Midwest presence, improved loyalty program economics, and charter and cargo efficiencies.

• Additional value is expected from fleet optimization, ancillary revenue opportunities, and cargo efficiencies.