It’s official, Air Canada has purchased Air Transat for $520 million.
The companies announced Thursday that Air Canada will pay $13 per share for the travel company.
According to the companies, the partnership will create a Montreal-based global leader in leisure, tourism, and travel distribution, offering Canadians choices to more destinations and promoting two-way tourism.
The two brands will still be maintained separately “to compliment” the Air Canada, Air Canada Rouge, and Air Canada Vacations brands and maintain their head offices in Montreal.
“We are delighted to have reached this definitive agreement to combine Transat with Air Canada to achieve the best possible outcome for all stakeholders,” said Calin Rovinescu, president and CEO at Air Canada.
“For shareholders of Transat and Air Canada, this combination delivers excellent value, while also providing increased job security for both companies’ employees through greater growth prospects,” said Rovinescu.
Rovinescu added that travellers will benefit from the merged companies’ and will be able to access new destinations, thanks to more connecting traffic and increased frequencies.
Air Canada and Transat A.T. Inc. Conclude Definitive Arrangement Agreement for Combination of the Two Companieshttps://t.co/EfGnZz8F7d
— Air Transat (@airtransat) June 27, 2019
The transaction remains subject to regulatory and shareholder approvals and other closing conditions.
If everything is approved and conditions are met, the transaction is expected to be completed in early 2020.
“This fully-funded cash transaction is the ideal platform for Transat’s presence and jobs in Montreal, and therefore represents the best option for all our stakeholders: employees, suppliers, partners, and shareholders,” said Jean-Marc Eustache, president and CEO of Transat.
“For our clients, it will offer even more choices and possibilities. For now, they can continue booking their flights and packages with complete confidence, as all bookings will be honoured before and after the closing of the transaction,” said Eustache.
According to the transaction agreement, if Air Transat backs out of the deal, they’ll have to pay Air Canada a fee of $15 million, whereas Air Canada would have to pay a fee of $40 million in the event the agreement is terminated for any reason.
This deal comes after WestJet announced it has been sold to Toronto-based Onex Corporation for $5 billion last month.