On Monday, Alaska Airlines said it had struck an agreement to buy smaller rival Virgin America for $57 a share, or about $2.6 billion, a premium of 47 percent over Virgin America's closing price on Friday. Alaska had been in a competitive bidding war with JetBlue, "a fierce back and forth between the two sides, with multiple bids for a number of days," one unidentified person told The Wall Street Journal, adding that JetBlue "put the pencil down" when the price got too high.
The combined Alaska-Virgin America would be the No. 5 U.S. carrier by traffic, supplanting JetBlue. The deal is expected to face some regulatory scrutiny. Alaska, an 84-year-old airline based in Seattle, is in good financial health and, like Virgin America, consistently wins awards for customer satisfaction. Virgin America began flying in 2007, went public in November 2014, and is jointly owned by Richard Branson's Virgin Group Ltd. and Cyrus Capital Partners LP.
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