Alaska Air Expected to Announce Virgin America Deal Today

Alaska Air Group Inc. is expected to announce Monday that it won the auction for Virgin America Inc., besting rival JetBlue Airways Corp. in a frenzied bidding process that culminated in a cash price of about $2.5 billion, according to people familiar with the matter.

This new chapter in airline consolidation amid low-fare carriers comes at a premium. The deal signed Friday night, according to one of the people, was more than $1 billion over Virgin America’s VA, +0.88% market capitalization on Friday, which had started to rise last month on takeover speculation.

Bidding between Alaska Airlines’ ALK, -0.01% parent and JetBlue JBLU, +0.99% was feverish, this person said, with the price continuing to rise. Alaska prevailed in part because of its clean balance sheet, which will allow it to more easily borrow funds for the acquisition, the person said. (Read more from “Alaska Air Expected to Announce Virgin America Deal Today” HERE)

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