Sir Richard Branson is expected to make almost £550m after Alaska Airlines agreed to pay $2.6bn (£1.8bn) for Virgin America, the US budget airline the British billionaire launched in 2007.
Alaska Airlines said it agreed to pay $57 a share, or $2.6bn, in cash for Virgin America, which flies to 21 destinations within the US and Mexico. Including Virgin America’s debt and aircraft operating leases, the deal is valued at $4bn.
Shares in Virgin America soared last month after reports that the company was up for sale. Branson’s Virgin group owns about 30% after floating the business on the stock market in 2014 with a value of slightly more than $1bn. The takeover by Alaska Airlines means Branson’s stake has more than doubled in value in the past year and a half.
The airline has attempted to stand out from established competitors in the US with an irreverent and playful image with purple mood lighting and planes named Virgin & Tonic and Jefferson Airplane. It is the the ninth biggest US airline by passenger numbers with about 1.5% of domestic flight capacity compared with 5% for Alaska Airlines. Read more