Alaska Airlines Snaps Up Virgin America for $2.6 Billion

Alaska Air Group Inc. is buying Virgin America in a deal worth more than $2 billion, combining their West Coast presence and reigniting the debate over airline consolidation.

Alaska Airlines will pay $57 in cash per Virgin America share. That's a 47 percent premium to its Friday closing price of $38.90. Virgin's shares rose more than 39 percent in premarket trading.

The companies put the transaction's value at about $4 billion, including debt and capitalized aircraft operating leases.