Allegiant Acquires Sun Country in $1.5 Billion Deal to Reshape Budget Travel

2026-01-12 companies

Minneapolis, Sunday, 11 January 2026.
Allegiant’s $1.5 billion acquisition of Sun Country marks a pivotal consolidation in the budget carrier market. The deal promises a nearly 20% premium for shareholders and creates a leisure powerhouse serving 22 million annual passengers.

Structuring the Merger

On January 10, 2026, the two carriers entered a definitive merger agreement valuing Sun Country at approximately $1.5 billion, a figure that includes $0.4 billion in net debt [4][8]. Under the terms of the transaction, Sun Country shareholders are set to receive 0.1557 shares of Allegiant common stock plus $4.10 in cash for each share held [4]. This offer implies a value of $18.89 per share, representing a premium of 19.8% over the closing price of $15.77 recorded on Friday, January 9, 2026 [8]. Upon completion, the ownership structure will see Allegiant shareholders holding approximately 67% of the combined entity, while Sun Country investors will retain 33% on a fully diluted basis [4].

Strategic Scale and Network Expansion

The strategic combination aims to integrate two complementary “flexible capacity” business models to better serve leisure travelers. The merged airline will command an operational fleet of approximately 195 aircraft; when accounting for confirmed orders, the carrier’s committed fleet extends to 225 vessels, exclusive of an additional 80 options [8]. This expansion is designed to facilitate a network spanning nearly 175 cities and over 650 routes, serving a combined base of 22 million annual passengers [4]. While the new entity will be headquartered in Las Vegas, it will maintain a significant operational presence in Minneapolis-St. Paul, which currently serves as Sun Country’s home base [8].

Synergies and Operational Integration

Financial efficiency drives the core rationale for this merger, with Allegiant projecting $140 million in annual synergies by the third year following the deal’s closure [4]. Corporate leadership anticipates the transaction will be accretive to earnings per share within the first year post-closing, targeting a Net Adjusted Debt to EBITDAR ratio of less than 3.0x at the time of closing [4]. Leadership roles have been clearly defined to ensure continuity: Allegiant CEO Gregory C. Anderson will lead the combined company, while Sun Country President and CEO Jude Bricker is slated to join the Board of Directors [8].

Market Sentiment and Future Outlook

Before the merger announcement, analyst sentiment was cautiously optimistic, with a consensus “Moderate Buy” rating and an average price target of $20.13, suggesting the market had already priced in upside potential closer to the acquisition price [6]. The transaction is subject to regulatory and shareholder approvals and is expected to close in the second half of 2026 [8]. To discuss the details, both companies have scheduled a joint investor conference call for Monday, January 12, 2026, at 8:30 AM ET [4].

Sources

Aviation Industry Stock Performance