Air Canada Agrees to Buy Air Transat for C$190 Million

Photo: The Globe & Mail (Canada)

Air Canada has concluded a cut price deal to acquire Air Transat. The flag-carrier will now acquire all shares in the smaller airline for C$5 each, payable to shareholders in cash or shares of Air Canada at a fixed exchange ratio of 0.2862 for each Transat share.

The value of the transaction is approximately C$190 million. However, this is sharply down from the originally-agreed offer, approved by Transat shareholders more than a year ago.

The amended transaction reflects the unprecedented impact of Covid-19 upon the global air transport industry, which has endured a severe decline in air travel since the initial agreement.

The transaction remains subject to shareholder approval, court approval and the approval of the Toronto Stock Exchange, as well as certain other conditions.

Regulatory approvals, including the ongoing process of regulatory authorities in Canada and the European Union, will also need to be completed.

If such approvals are obtained and the conditions are met, the transaction is expected to be completed in late January or early February.