Allegiant-Sun Country merger: sound logic but Sun Country transaction share price down 56% from post-IPO peak
Sun Country Airlines' market capitalization has fallen significantly since its IPO in 2021.
Despite commanding an almost 20% premium over the carrier’s pre-announcement share price, Sun Country Airlines’ merger valuation has implied a 56% lower share price compared to its April 2021 peak shortly after the airline’s Initial Public Offering (IPO).
On January 11, 2026, Allegiant Air announced that it would acquire Sun Country Airlines in a stock-and-cash deal “at an implied value of $18.89” per share, pricing the transaction at $1.5 billion. The sum includes $400 million of Sun Country Airlines’ debt, implying a fully-diluted equity value of $1.1 billion, according to the two airlines’ merger announcement.
The $18.99 per share is a 19.8% premium compared to the Sun Country Airlines’ stock price on January 9, when the share price closed at $15.77.
While the merger could be considered a win for Sun Country Airlines’ shareholders today and the industrial logic of the combination is sound, the airline’s valuation has fallen substantially since it went public in March 2021. Just a month after the public offering, the carrier’s share price peaked at $43.08, according to data from Yahoo Finance.
The merger proposal implies a 56% fall in Sun Country Airlines’ share price compared to its post-IPO peak, reflecting today’s more challenging environment for US leisure carriers and perhaps overly frothy valuations in 2021.
Still, during a call with investors about the merger on January 12, Jude Bricker, the Chief Executive Officer (CEO) of Sun Country Airlines, pointed out that the airline has delivered 13 consecutive profitable quarters.
On the same call, Bricker said that the carrier believed that the merger would “deliver long-term growth and value creation for our shareholders.”
Frontier Airlines has also seen its share price fall by over 70% since its IPO in April 2021, while Allegiant Air’s own share price is down 54% in the past five years.
Rytis Beresnevicius
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