Spirit airline Inc on Thursday signed a $3.8 billion buyout deal with its low-cost competitor jetblue airlines.
end a long-running dispute for the carrier which would allow it to become the fifth largest U.S. airline.
The win for jetblue airways is a result of Spirit canceling its $2.7 billion deal in exchange for frontier airline Group Holdings
But the possible merger is likely to spark an antitrust battle with regulators.
The Jetblue Barclay offer of $33.50 per share is the equivalent of 38% of the cost of closing Spirit shares.
Once the deal is concluded The offer could be increased in value to $34.15 for each share.
spirit airlines español shares were up almost 5 percent prior to the time of the bell, as investors celebrated the conclusion of a takeover story that started in April.
JetBlue air gained 1% however, Frontier was 1.6 percent higher.
Both airlines were involved in a bidding battle to create a new airline that could rival the existing U.S.
carriers at a moment when the industry is facing an increase in labor costs and the cost of jet fuel.
The decision is a setback to Franke who was the key person in initiating talks with Spirit in the past.
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