The Alaska Air Group ( ALK 0.03% ) has successfully overcome a major obstacle in its pursuit of acquiring Hawaiian Holdings is the name of the company. ( HA 11.34% ) , causing the target company’s stock to soar.
Hawaiian’s shares saw an 11% increase on Tuesday morning following the announcement by the U.S. Department of Justice that it would not oppose the $1.9 billion agreement.
Approaching the end point
Alaska agreed to obtain or secure something from Hawaii In December of last year, the agreement was reached, but it did not guarantee the merger would happen. Regulators have been showing more doubt towards airline mergers. The Justice Department also raised concerns earlier this year. brought to a halt JetBlue Airways is an airline company. from acquiring Spirit Airlines is an American ultra-low-cost carrier that operates flights throughout the United States and to the Caribbean, Mexico, Latin America, and South America. .
The Alaska/Hawaiian agreement has significantly fewer routes that overlap compared to JetBlue/Spirit, making it a more appealing option to regulators. The Justice Department announced on Tuesday that they decided not to contest the merger based on antitrust concerns.
If finalized, this agreement would mark the first airline merger to be completed since Alaska acquired Virgin America in 2016.
Should I invest in Hawaiian Holdings?
Alaska referred to the Justice Department’s decision as a major step towards the airlines’ merger. However, the airlines still require approval from the Department of Transportation and fulfillment of other closing requirements.
Following the announcement of the merger, it was believed that Justice posed a greater obstacle than Transportation. Now that this hurdle has been overcome, it is likely that Alaska will acquire Hawaiian. However, as Hawaiian’s shares are currently trading very close to the $18-per-share cash buyout price, there is little incentive for new investors to get involved at this time.
Alaska may become a more attractive choice. This agreement would provide it with increased size to enhance its competitiveness against bigger competitors. airlines Additionally, Alaska offers access to one of the top vacation spots within the country. However, Alaska will be busy with the process of integration for now, so investors should consider waiting before making any moves.
