JetBlue Airways said Friday it may back out of its $3.8 billion acquisition of Spirit Airlines after a federal judge blocked the deal.
The announcement comes just a week after JetBlue and Spirit said they would appeal the decision, which was made in an antitrust case brought by the Justice Department.
one in regulatory filing On Friday, JetBlue said the deal could be canceled after Sunday if certain conditions are not met. Soul said in its filing It disagreed with JetBlue’s reasoning and believed there were “no grounds to terminate” the deal.
A federal judge in Boston blocked the proposed merger on January 16, saying Spirit plays a vital role in keeping airline fares low and that a takeover by JetBlue would harm passengers. The decision was a victory for the Justice Department, which has sought to limit corporate consolidation in the economy under President Biden.
The companies said last week they were preparing an appeal. As part of the merger agreement, JetBlue agreed to pay Spirit and its shareholders a combined $470 million if regulators blocked the deal.
Spirit’s share price fell nearly 16 percent on Friday morning. Its stock has lost more than half its value since the deal was blocked because the company is not profitable and investors are concerned the airline is taking on too much debt. Spirit has also been forced to ground some of its jets due to engine problems.
The share price of JetBlue, which could have saved billions of dollars by not appealing and taking the deal, was up slightly Friday morning.