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Alaska Air (NYSE:ALK) said Sunday it agreed to acquire Hawaiian Airlines (HA) for $18/share in cash, valuing the transaction at ~$1.9B including debt.
The companies said the combination of complementary domestic, international and cargo networks would enhance competition and expand choice for consumers on the U.S. west coast and the Hawaiian Islands.
Alaska Air (ALK) said $235M of expected run-rate synergies reflect a conservative estimate of the deal’s synergy potential.
The company also expects the deal will generate high single digit earnings accretion within the first two years and high teens thereafter, and mid-teens return on investment capital by year three, excluding integration costs, with returns above Alaska Airlines’ (ALK) cost of capital.
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