Air Canada and Air Transat Agree Merger

Two of Canada’s biggest airlines, flag carrier Air Canada, and leisure leader Air Transat, have concluded merger talks pending shareholder approval.

Air Canada will effectively acquire all the shares of Air Transat, at the price of $13 per share, valuing the deal at around $520 MILLION.

Proposals for a merger of operations were first mooted in 2018 with Air Canada making an approach to the board of Air Transat to enter into discussions about a possible combination of the two companies.

Calin Rovinescu, President and Chief Executive Officer at Air Canada 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.

“Air Canada intends to preserve the Transat and Air Transat brands and maintain the Transat head office and its key functions in Montreal. Both companies have demonstrated excellence as evidenced by the 2019 Skytrax Awards. Travelers will benefit from the merged companies’ enhanced capabilities in the highly competitive, global leisure travel market and from access to new destinations, more connecting traffic and increased frequencies.

“The Quebec economy will derive maximum advantage of having a Montreal-based, growth-oriented global champion in aviation, the world’s most international business.”

Jean-Marc Eustache, President and Chief Executive Officer of Transat added; “We are very pleased to join forces with such a successful player in our industry. The combination with Air Canada will give Transat new perspectives of growth, with the support of a strong network offering many options for connecting traffic.

“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.

“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.”

Assuming regulatory hurdles are successfully navigated, and shareholder approval is granted, it is expected that the merger will be completed sometime early in 2020.