Transat in Air Canada takeover

Canada’s third-largest airline Air Transat is being taken over by Air Canada after the national carrier bought the smaller company’s parent group Transat AT in a deal worth a reported C$520m (about £313m) after several months of negotiations.

The companies issued a letter of intent in May with the deal pegged at about C$13 (£7.80) a share but the process was delayed by a rival offer from a second bidder. This was subsequently rejected.

Air Canada president and CEO Calin Rovinescu said: “We are delighted to have reached this definitive agreement to combine Transat with Air Canada to achieve the best possible outcome for all stakeholders.

“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.”

The takeover is subject to approval by shareholders and Canada’s competition watchdog will also be looking at the deal since the two airlines combined will represent a 60% share of transatlantic travel from Canada.

However, officials at both companies said they expect the takeover to be given the go-ahead, with completion by early next year.

www.transat.com

www.aircanada.com

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