Canadian stir ups: WestJet to go private, Air Canada expand
Ownership changes are looming over Canadian airlines. First, private equity company Onex announced intentions to buy WestJet, and now Air Canada is looking into Montreal based tour operator with a private airline of its own.
Air Canada is eyeing purchase of Transat, a Montreal-based tour operator, which has around 20 business unites, including leisure carrier Air Transat ‒ the fourth biggest carrier in the country by fleet size, Canada’s national carrier has revealed on May 16, 2019.
As per agreement, Air Canada intends to purchase Transat to create a Montreal-based global travel services company in leisure, tourism and travel distribution, which would operate both across Canada and internationally.
The value of the deal is approximately $ 385.7 million (520 million CAD) or $9.6 (13.00 CAD) per share of Transat on a fully-diluted basis. Air Canada claims it has all the necessary funding required to complete the transaction.
Also on May 16, 2019, Transat confirmed the news, stating that the company has agreed to “a 30-day period of exclusive negotiations with Air Canada”. No difinitive agreements have been signed yet and the deal is subject to regulatory and shareholder approvals as well as other closing conditions.
The news comes days after Onex Corporation, private equity firm, revealed intentions to acquire WestJet, Canada’s second biggest airline. On May 13, 2019, the airline confirmed a definitive agreement that provides for its acquisition in an all-cash transaction. If an estimated $3.7 billion worth deal is carried through, WestJet would become a privately held company.
This is not the first time Onex attempts to buy an airline, as Bloomberg has found out. In 1999, the company sought purchase of Air Canada and in 2007 it was eyeing Australian Qantas.
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