Alaska, Virgin America airlines’ merger deal to yield $7 billion yearly

alaska airAlaska Air and Virgin America have struck a merger agreement, under which Alaska Air Group will acquire Virgin America for $57.00 per share, representing a total equity value of $2.6 billion. AeroTime had earlier reported that Alaska Air had beaten JetBlue in a brief bidding for the carrier.Alaska Air is likely to buy Virgin America for $2 billion

Alaska Airlines is expected to pay $56 and $58 per Virgin America’s share, bringing total possible deal value to $2 billion.

The deal is expected to yield $225 million annually in total net synergies at full integration. One-time integration costs are expected to be between $300-350 million. The combined airline is projected to have annual revenues of more than $7 billion. The carriers expect to complete the transaction with regulators’ approval no later than Jan. 1, 2017.

We look forward to bringing together two incredible groups of employees to build on the successes they have achieved as standalone companies to make us an even stronger competitor nationally,” said Brad Tilden, chairman and CEO of Alaska Air Group.

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