Two Major Canadians Airlines Could Merge

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Published May 16, 2019 at 2:26 pm

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Big news for Canadian travellers–two major airlines could merge very soon.

Air Canada recently announced that it has entered into an exclusive agreement with Transat A.T. Inc. regarding the proposed purchase by Air Canada of all shares of Transat.

If this proposed purchase goes through, Transat will be combined with Air Canada.

The proposed transaction, valued at approximately $520 million (or $13.00 per share of Transat on a fully-diluted basis), will create a Montreal-based global travel services company that will operate across Canada and internationally.

Air Canada says it has all the necessary funding required to complete the transaction which is accordingly not subject to financing conditions.

“A combination with Transat represents a great opportunity for stakeholders of both companies.  This includes the shareholders of both Transat and Air Canada, employees of both companies, who will benefit from increased job security and growth prospects, and Canadian travellers, who will benefit from the merged company’s enhanced ability to participate as a leader in the highly competitive leisure travel market globally,” said Calin Rovinescu, President and Chief Executive of Air Canada.

“The acquisition presents a unique opportunity to compete with the very best in the world when it comes to leisure travel. It will also allow us to further grow our hub at Montréal-Trudeau Airport, where we have added 35 new routes since 2012 to the benefit of the Montreal and Quebec communities, and from which we carried 10 million customers in 2018 alone.”

The transaction remains subject to various closing conditions typical for this type of purchase.

Air Canada says there is no assurance that the transaction will be completed and no further announcements are expected to be made by Air Canada until the signature of the definitive agreements (unless required by law).

Air Canada has retained Morgan Stanley as its financial advisor.

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