Hawaiian Holdings Stock Surges on Extended Review of Alaska Airlines Takeover
Key Takeaways
- Shares of Hawaiian Holdings rose Wednesday after the Hawaiian Airlines parent agreed to extend the U.S. Department of Justice’s review period of its proposed acquisition by Alaska Air Group.
- The review period for the $1.9 billion deal was originally set to expire earlier this month, and has so far received two extensions, with the new deadline set for 12:01 a.m. ET Friday.
- Regulators have ramped up antitrust investigations into the airline industry recently, with DOJ lawsuits leading JetBlue and Spirit Airlines to call off their merger earlier this year.
Shares of Hawaiian Holdings (HA) surged 6% in intraday trading Wednesday after the Hawaiian Airlines parent agreed to extend the U.S. Department of Justice’s review period of its proposed acquisition by Alaska Air Group (ALK).
Hawaiian and Alaska Air said they “continue to cooperate” with the DOJ during the review process, whose deadline was extended by 24 hours to 12:01 a.m. ET Friday, according to a Securities and Exchange Commission (SEC) filing.
Review Period Approaches Finish Line Amid Antitrust Questions
The $1.9 billion deal, which led Hawaiian shares to nearly triple their value when it was first announced last December, has faced delays as the DOJ initially requested additional information to assess the antitrust implications of the merger in February.
The sides said they had “certified substantial compliance” with the requests in May, triggering the start of a 90-day review period before the merger could be completed, which was originally set to expire Aug. 5. The review period has now been extended twice, initially to Aug. 15 and again when the companies agreed to extend the period to Friday.
The Biden administration has been especially scrutinous of mergers in the airline industry, citing concerns that a few key carriers have become too powerful and taken choices away from customers. Antitrust investigations and lawsuits led JetBlue Airways (JBLU) and Spirit Airlines (SAVE) to call off their own merger earlier this year.
Hawaiian shares rose 6.3% to $14.94 as of 10:45 a.m. ET Wednesday, while Alaska Airlines shares moved 1.2% lower to $35.05.
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Conclusion
The extension of the U.S. Department of Justice’s review period for the proposed acquisition of Hawaiian Airlines by Alaska Air Group has led to a surge in the stock price of Hawaiian Holdings. The $1.9 billion deal has faced delays due to antitrust concerns, with the DOJ requesting additional information to assess the implications of the merger. The Biden administration has been closely monitoring mergers in the airline industry to prevent the concentration of power among a few carriers. This scrutiny has already led to the cancellation of mergers between JetBlue Airways and Spirit Airlines. As the review period approaches its new deadline, investors are closely watching the outcome of the Hawaiian Airlines and Alaska Air Group merger.
Disclaimer: The information provided here is for informational purposes only and should not be considered as financial advice. Investing in stocks carries a certain level of risk, and investors should do their own research and consult with a financial advisor before making any investment decisions.
