By Rebecca Picciotto - CNBC
Alaska Airlines has agreed to acquire rival Hawaiian Airlines in a deal valued at about $1.900 billion, as both companies strive to expand along the West Coast.
The purchase values Hawaiian Airlines at $18 per share, and includes taking on $900 million of the company's debt, a Sunday news release said. Hawaiian Airlines shares closed Friday at $4.86, giving the company a market capitalization of about $250 million.
The transaction is expected to close in the next year or 18 months. The combined companies will be headquartered in Seattle, where Alaska Airlines is headquartered, and will be led by Chief Executive Ben Minicucci.
Alaska and Hawaiian Airlines planes take off at the same time from San Francisco International Airport (SFO), in San Francisco, California, on June 21, 2023.Tayfun Coskun/Anadolu Agency via Getty Images
The two airlines said they will try to "maintain" the identity of each of their brands, but that they will operate under a single platform and create a combined fleet of 365 aircraft to cover some 138 destinations.
"With the new size and additional resources that this transaction with Alaska Airlines brings, we will be able to accelerate investments in customer service and technology while maintaining the Hawaiian Airlines brand," Peter Ingram, Hawaiian Airlines' chief executive, said in the statement.
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The combination will allow Alaska Airlines to triple nonstop or single-stop flights from the Hawaiian Islands to destinations throughout the United States.
Alaska Airlines said the deal should boost profits over the next two years with at least $235 million in savings.
[Hiring of temporary workers for the holidays falls]
"We are fully committed to investing in Hawaii's communities and maintaining the robust service to neighboring islands that Hawaiian Airlines travelers expect," Minicucci said in the statement.