Air Canada Close to Acquiring Transat A.T. Inc. for $520 Million
Air Canada is close to acquiring Transat. Today, Transat AT Inc. announced it has agreed to a 30-day period of exclusive negotiations with Air Canada. This would greatly alter the Canadian travel landscape as it would give Air Canada an even greater share of the market as it battles WestJet domestically.
Air Canada is expected to acquire all of the shares of Transat at a price of $13.00 per share. During this exclusivity period, it is contemplated that Air Canada will complete its due diligence review and the parties will finalize the negotiation of a definitive agreement regarding this transaction. The deal could be worth around $520 million.
“This announcement is good news for Transat”, said Jean-Marc Eustache, President and Chief Executive Officer of Transat. “This is an opportunity to team up with a great company that knows and understands our industry and has had undisputable success in the travel business. This represents the best prospect for not only maintaining, but growing over the long term the business and jobs that Transat has been developing in Quebec and elsewhere for more than 30 years.”
The press release says that “Transat operations continue in the normal course and that there will be no change for its clients, suppliers and employees. In particular, travellers and clients of Transat can continue to travel and book their vacation packages with Transat like before.”
The news comes after Toronto-based Onex said it had purchased WestJet earlier in the week. Onex and WestJet were expected to soon go after Transat themselves, but seems like Air Canada got there first.