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In response to
"66% premium over market cap"
by
Reagen
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I believe I read that Delta paid 3.1B for the Northwest merger (3.4B in 2016 dollars)
Posted by
ty97
Apr 3 '16, 15:58
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Northwest flew to 254 destinations, had a fleet of 300 planes, and hubs at Minneapolis, Detroit, Memphis, Tokyo and Amsterdam. (Other than Memphis, which was too close to Delta's Atlanta stronghold to survive de-hubbing, the other hubs remain intact.)
Virgin America flies to 24 (10% the number of Northwest) destinations, has a fleet of 60 planes (20% the size of Northwest) and hubs at SFO and LAX.
I'm no M&A expert. And I realize Alaska has not appreciated competition on the west coast from Virgin *and* they would not appreciate it from a merged Jetblue/Virgin. Still, this price seems awfully steep to eliminate a competitor. Jetblue was smart to walk away at this price IMO.
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