Allegiant Travel Co. has agreed to acquire Sun Country Airlines in a cash-and-stock transaction valued at roughly $1.5 billion including debt, a tie-up that would create a larger, leisure-focused low-cost airline with a combined fleet of about 195 aircraft and service spanning roughly 175 cities across more than 650 routes. (Reuters) The companies are framing the deal as a scale play in a market where demand is highly seasonal and cost discipline matters, arguing that their networks are complementary enough to expand options for travelers without immediately forcing major changes to how either carrier operates day to day. (AP News)

The strategic logic centers on combining two similar business models—low fares aimed at leisure travelers—while gaining operational efficiencies that are harder to achieve at smaller size. Allegiant and Sun Country have pointed to fleet optimization, procurement leverage, and network breadth as key drivers, with the companies projecting about $140 million in annual synergies by the third year after closing and integration. (Reuters) Sun Country also brings charter and cargo flying that Allegiant says it plans to continue, adding another revenue stream to a platform that has historically leaned heavily on discretionary vacation travel. (AP News)

For shareholders, the headline is the payout structure and the ownership split it implies. Sun Country shareholders are set to receive $4.10 in cash plus 0.1557 shares of Allegiant for each Sun Country share, a package the companies said valued Sun Country at $18.89 per share at announcement and represented about a 19.8% premium to Sun Country’s prior close. (Reuters) After the deal, Allegiant shareholders are expected to own about 67% of the combined company and Sun Country shareholders about 33%, meaning Sun Country investors retain meaningful upside exposure to the combined carrier’s performance rather than cashing out entirely. (Reuters)

Operationally, the plan is for the combined airline to operate under the Allegiant name, with headquarters in Las Vegas and a continued significant presence in Minneapolis–St. Paul, where Sun Country is based. (AP News) Allegiant CEO Gregory Anderson is expected to lead the combined company, and Sun Country CEO Jude Bricker is slated to join the board, signaling continuity while Allegiant drives the integration. (Reuters) The transaction is targeted to close in the second half of 2026, subject to regulatory approvals and votes from shareholders. (Reuters)

In the market, the immediate sentiment has followed the usual M&A script: the target jumped on the takeover value while the buyer absorbed the near-term uncertainty of integration and deal financing. Shares recently showed Sun Country (SNCY) around $17.06 and Allegiant (ALGT) around $86.07 in the latest quote available, with both moving modestly on the day after the initial announcement reaction. The longer-running verdict will hinge on whether the airlines can deliver the promised synergies, navigate antitrust review, and prove that a bigger leisure-focused network can hold up through fuel-price swings and the inevitable peaks and troughs in vacation demand. (Reuters)