Frontier and Spirit to merge creating fifth-largest airline in U.S. in $6.6 billion deal

Frontier Airlines and Spirit Airlines, the two largest low-cost carriers in the U.S., have agreed to merge in a deal valued at $6.6 billion, creating what would become the fifth-largest airline in the country.

The merger gives Denver-based Frontier Airlines a 51.5% controlling stake in the combined airline. Spirit investors will receive 1.9126 shares of Frontier plus $2.13 in cash for each share they own, giving Spirit shareholders an implied value of $25.83 per share, which is a 19% premium over the value of Spirit shares at the end of last week, the companies said.

"This transaction is centered around creating an aggressive ultra-low fare competitor to serve our guests even better, expand career opportunities for our team members and increase competitive pressure, resulting in more consumer-friendly fares for the flying public," Ted Christie, president and CEO of Miramar, Fla.-based Spirit, said in a statement announcing the deal.

The boards of both companies approved the deal over the weekend. The deal would be the first merger U.S. airlines since the Alaska Airlines combination with Virgin America in 2016.