Jan 11 (Reuters) - Low-cost airline Allegiant will acquire Sun Country Airlines in a deal valued at about $1.5 billion, including debt, the companies said on Sunday.

As part of the agreement, Sun Country shareholders will receive 0.1557 Allegiant shares and $4.10 in cash for each share, valuing the stock at $18.89, representing a premium of about 19.8% to its Friday close of $15.77.

The deal will expand the combined company's network, adding more destinations across the United States and international markets. The fleet will include about 195 aircraft, with additional orders and options.

The combined company, which will be headquartered in Las Vegas, is expected to generate $140 million in annual synergies by the third year after closing, and the transaction will be accretive to earnings per share in the first year. The deal is expected to close in the second half of 2026.

Upon closing, Allegiant and Sun Country shareholders will own about 67% and 33% respectively of the combined company.

Allegiant CEO Gregory Anderson will lead the combined company as chief executive officer, while Robert Neal will serve as president and chief financial officer. Sun Country CEO Jude Bricker will join the board of directors.