Alaska Airlines in $1.9bn deal for Hawaiian rival

February 2024 | DEALFRONT | MERGERS & ACQUISITIONS

Financier Worldwide Magazine

February 2024 Issue

Shaking up the market for flights to Hawaii, US airline holding company Alaska Air Group, Inc. has acquired its rival Hawaiian Airlines in a transaction valued at approximately $1.9bn, including $900m net debt.

Under the terms of the definitive agreement, Alaska Airlines will acquire Hawaiian Airlines for $18 per share in cash. The transaction agreement has been approved by the boards of both companies.

As airlines rooted in the 49th and 50th US states, which are uniquely reliant upon air travel, the combined company will unlock more destinations for consumers and expand choice of critical air service options and access throughout the Pacific region, the continental US and globally.

The transaction is expected to enable a stronger platform for growth and competition in the US, as well as long-term job opportunities for employees, continued investment in local communities and environmental stewardship.

“This combination is an exciting next step in our collective journey to provide a better travel experience for our guests and expand options for West Coast and Hawaii travellers,” said Ben Minicucci, chief executive of Alaska Airlines. “We have a longstanding and deep respect for Hawaiian Airlines, for their role as a top employer in Hawaii, and for how their brand and people carry the warm culture of aloha around the globe.”

Sharing a deep commitment to caring for their employees, guests and communities, the combination will build on the 90-plus year legacies and cultures of these two service-oriented airlines, preserving both brands on a single operating platform, and protecting and growing union-represented jobs and economic development opportunities.

“Since 1929, Hawaiian Airlines has been an integral part of life in Hawaii, and together with Alaska Airlines we will be able to deliver more for our guests, employees and the communities that we serve,” added Peter Ingram, president and chief executive of Hawaiian Airlines. “In Alaska Airlines, we are joining an airline that has long served Hawaii, and has a complementary network and a shared culture of service.”

“With the additional scale and resources that this transaction with Alaska Airlines brings, we will be able to accelerate investments in our guest experience and technology, while maintaining the Hawaiian Airlines brand,” he continued. “We are also pleased to deliver significant, immediate and compelling value to our shareholders through this all-cash transaction.”

The combined organisation will be based in Seattle under the leadership of Mr Minicucci. Additionally, a dedicated leadership team will be established to focus on integration planning.

The acquisition is conditioned on required regulatory approvals, approval by Hawaiian Holdings, Inc. shareholders, and other customary closing conditions. It is expected to close in 12 to 18 months.

Serving as financial advisers to Alaska Airlines are BofA Securities and PJT Partners, with O’Melveny & Myers LLP serving as legal adviser. Barclays is serving as financial adviser and Wilson Sonsini Goodrich & Rosati is serving as legal adviser to Hawaiian Airlines.

Mr Ingram concluded: “Together, Hawaiian Airlines and Alaska Airlines can bring our authentic brands of hospitality to more of the world while continuing to serve our valued local communities.”

Fraser Tennant