US JetBlue Abandons Spirit Airlines Acquisition Following Court Halt

"Low Possibility of Regulatory Approval in the Near Future"

U.S. low-cost carrier JetBlue has abandoned its merger and acquisition (M&A) plan with Spirit Airlines after facing a legal roadblock.

On the 4th (local time), JetBlue announced in a statement that "the likelihood of obtaining the necessary legal and regulatory approvals by the specified deadline is low," and decided to cancel the merger plan.

The collapse of the merger between the two companies is due to a court ruling. Previously, in July 2022, JetBlue signed a contract to acquire Spirit Airlines for $3.8 billion (approximately 5 trillion KRW). It was expected to complete the merger with regulatory approval by the first quarter of 2024 at the latest. However, the situation worsened when the U.S. District Court for Massachusetts accepted the Department of Justice's request in January, ruling that the merger would violate antitrust laws by eliminating low-cost competitors, leading to price increases and reduced competition. The two companies appealed immediately after the ruling, but due to delays in the merger process, Spirit Airlines ultimately gave up on the merger.

Joanna Geraghty, JetBlue's Chief Executive Officer (CEO), stated in an internal message to employees that "the likelihood of the merger moving forward soon is very low," and added, "The ongoing uncertainty is distracting our focus and diverting our resources from more urgent priorities."

JetBlue plans to pay Spirit $69 million (approximately 92 billion KRW) for legal fees and other costs related to the merger cancellation and appeals. JetBlue is also under pressure from activist investor Carl Icahn, who holds a 10% stake and secured two seats on the board last month.

Meanwhile, JetBlue's stock price rose 3.86% as of 11:12 a.m. Eastern Time following the news of the failed merger with Spirit Airlines. Spirit Airlines' stock is down 14.54%.