Airlines Air Canada and Transat have announced the conclusion of a definitive agreement for the combination of the two companies.
Under the binding agreement, Air Canada is to acquire all of Transat’s outstanding shares for CA$13 (US$9.9) each. The total value of the all cash transaction is approximately $520mn.
"We are delighted to have reached this definitive agreement to combine Transat with Air Canada to achieve the best possible outcome for all stakeholders,” said Calin Rovinescu, President and CEO of Air Canada. “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."
The companies said that the combination will allow them to become a global leader in leisure, tourism and travel distribution.
"We are very pleased to join forces with such a successful player in our industry,” said Jean-Marc Eustache, President and Chief Executive Officer of Transat. “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."
Having received unanimous approval from the board of directors, the deal, subject to the usual closing conditions and approvals, is expected to close in early 2020.