Allegiant and Sun Country Airlines announced a definitive merger agreement on January 11, 2026, under which Allegiant will acquire Sun Country in a cash and stock transaction valued at approximately $1.5 billion. This valuation includes $0.4 billion of Sun Country's net debt. The strategic move aims to create an expanded leisure-focused U.S. airline with a broadened network and diversified operations.
Transaction Details
Under the terms of the agreement, Sun Country shareholders are slated to receive 0.1557 shares of Allegiant common stock and $4.10 in cash for each Sun Country share. This represents an implied value of $18.89 per Sun Country share. This implied value signifies a 19.8% premium over Sun Country's closing share price of $15.77 on January 9, 2026. Following the transaction's completion, Allegiant shareholders are projected to own approximately 67% of the combined entity, with Sun Country shareholders owning 33%.
Strategic Rationale and Combined Operations
The merger is intended to establish a prominent leisure-focused U.S. airline, expanding service to various vacation destinations within the U.S. and internationally. Key benefits cited for the merger include:
- Expanded Network: The combined entity is projected to serve 22 million annual customers across nearly 175 cities, operating over 650 routes with a fleet of 195 aircraft. This includes Allegiant's 551 existing routes and Sun Country's 105 routes.
- International Reach: The acquisition provides access to Sun Country's international network, offering service to 18 destinations across Mexico, Central America, Canada, and the Caribbean.
- Operational Integration: The integration of scheduling and fleet management is expected to enhance on-time performance and allow for flexible capacity adjustments to match demand.
- Loyalty Program: An expanded loyalty program will combine Sun Country's 2 million members with Allegiant's 21 million existing base.
- Diversified Operations: The merged airline is anticipated to benefit from diversified revenue streams, including Sun Country's long-term charter contracts (e.g., Amazon Prime Air, casinos, sports teams, Department of Defense) and cargo partnerships.
- Fleet Optimization: The combined company plans to operate both Airbus and Boeing aircraft, with intentions to utilize Allegiant's 737 MAX fleet and order book more fully.
Financial Projections
Allegiant anticipates achieving $140 million in annual synergies within three years post-closing, primarily from network expansion, scale efficiencies, fleet optimization, and procurement initiatives. The transaction is projected to be accretive to earnings per share one year after closing. The combined company expects Net Adjusted Debt to EBITDAR to be less than 3.0x at closing.
Leadership and Structure
Following the close, Allegiant will operate as the publicly held parent company under the Allegiant name. Each airline will maintain separate operations until a single operating certificate is obtained from the Federal Aviation Administration (FAA).
Gregory C. Anderson, current Allegiant CEO, will serve as Chief Executive Officer of the combined company. Robert Neal will serve as President and Chief Financial Officer. Jude Bricker, current Sun Country President & CEO, will join the Board of Directors, which will expand to 11 members, including two additional Sun Country board representatives. Maury Gallagher will remain Chairman. The combined company will be headquartered in Las Vegas, Nevada, with a significant operational presence maintained in Minneapolis-St. Paul, Minnesota.
Timeline and Approvals
The boards of directors of both companies have unanimously approved the transaction. The acquisition is expected to close in the second half of 2026, pending U.S. federal antitrust and other regulatory approvals, as well as the approval of both companies' shareholders.