Alaska Air buys Virgin America

BLOOMBERG: Alaska Air will buy Virgin America for $2.6 billion.

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Alaska Air, which first approached Virgin America about a deal last fall, had to overcome competition from JetBlue Airways Corp. to secure the deal. It will pay $57 a share for Virgin America stock, a 47 percent premium to its closing price April 1 and 86 percent above its value March 22, the day before Bloomberg News first reported a possible deal was in the works. The transaction is valued at about $4 billion including debt and capitalized aircraft operating leases, Seattle-based Alaska said Monday.

The acquisition extends a round of consolidation that has shrunk the number of carriers in the U.S. airline industry since 2005, and expands Alaska’s service from the Pacific Northwest to tech-centric San Francisco and Los Angeles. It also gives the carrier access to the lucrative cross-country market.

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