Virgin America Surges 40% As Alaska Air Confirms $57 Per Share Acquisition

Shares of Virgin America Inc VA surged higher by more than 39 percent early Monday to trade at $54 after Alaska Air Group, Inc. ALK confirmed it has entered into an agreement to acquire the airline for $57.00 per share in cash.

Alaska Air stated the transaction is expected to be accretive to its adjusted earnings per share in the first full year. The deal will increase its annual revenue by 27 percent to more than $7 billion, generate $225 million in total net synergies and "bolsters its platform for growth."

The deal has already been unanimously approved by the Boards of Directors of both companies.

"Our employees have worked hard to earn the deep loyalty of customers in the Pacific Northwest and Alaska, while the Virgin America team has done the same in California. Together we will continue to deliver what customers tell us they want: low fares, unmatched reliability and outstanding customer service," said Brad Tilden, chairman and CEO of Alaska Air Group. "With our expanded network and strong presence in California, we'll offer customers more attractive flight options for nonstop travel. We look forward to bringing together two incredible groups of employees to build on the successes they have achieved as standalone companies to make us an even stronger competitor nationally."

David Cush, Virgin America president and CEO said, "Our mission has always been to create an airline that people love – and we accomplished that while changing the industry for the better. Joining forces with Alaska Airlines will ensure that our mission lives on, and that the stronger, combined company will continue to be a great place to work and an airline that focuses on an outstanding travel experience."