Republic Airways Holdings Inc. and Mesa Air Group, Inc. today announced that they have entered into a definitive agreement to merge and create a leading publicly-traded regional airline company in an all-stock transaction.
Upon closing of the transaction, Republic shareholders will own 88% of the combined company's common shares. Mesa shareholders will own a minimum of 6%, and up to 12% of the combined company dependent upon Mesa's achievement of certain pre-closing criteria. All outstanding Mesa debt obligations will be extinguished as a result of the transaction.
The combined company will be renamed Republic Airways Holdings Inc. and is expected to remain NASDAQ-listed under the new ticker symbol "RJET".
The post-merger company will maintain a single fleet of approximately 310 Embraer 170/175 ("E-Jet") aircraft, with over 1,250 daily departures, across both airlines' existing flying networks and will operate within Mesa's and Republic's current basing structures and routes.
Mesa and Republic will continue to operate under their existing Federal Aviation Administration (FAA) operating certificates until securing a single-operating certificate for the combined airline.
Jonathan Ornstein, Mesa's Chairman and Chief Executive Officer, said:
"Today's announcement is an exciting next step in Mesa's more than 40-year history, one that represents the best outcome for our shareholders, employees, and all of our stakeholders," "By bringing the best of our organizations together, we will create a regional carrier that continues to connect communities across America while providing advancement opportunities to our employees."
Bryan Bedford, Republic's President and Chief Executive Officer, said:
"We're thrilled to combine the Republic and Mesa teams to create one of the world's leading Embraer Jet operators," said "Republic and Mesa share a common mission to connect communities across America, and we believe that we can better achieve that mission together. With this combination, we are establishing a single, well-capitalized, public company that will benefit from the deep expertise of Republic and Mesa associates, creating value for all stakeholders well into the future."
Republic will continue to support American Airlines, Delta Air Lines, and United Airlines under its existing capacity purchase agreements ("CPA"), and Mesa's operations will support United Airlines under a new 10-year CPA, as a result of this transaction.
The combined company is expected to produce revenues of approximately $1.9 billion, pretax margins of 7% to 9%, excluding one-time merger and integration costs, and adjusted EBITDA in excess of $320 million. As part of the transaction, Mesa will not contribute any debt to the combined airline.
The pro forma cash and debt balances post-merger are forecasted to be $285 million and $1.1 billion, respectively. The transaction is anticipated to deliver value creation for both Mesa and Republic shareholders, who stand to benefit from the ownership of a better capitalized airline with increased economies of scale, due to Republic's strong financial position, stable earnings and cash flow.
The combined company will be led by Republic's executive leadership team. The Board of Directors will be comprised of six existing directors from the Republic Board of Directors and one independent director from the Mesa Board of Directors.
The transaction has been unanimously approved by the Boards of Directors of both companies and is expected to close in either the late third or early fourth quarter of 2025. The transaction is subject to customary closing conditions, including regulatory and shareholder approvals by both companies.
Both Mesa and Republic are included in the International Air Transport Association's Operational Safety Audit (IOSA) registry, the internationally recognized standard for airline safety and operational excellence.
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