Air Canada on May 16 announced it has entered into an exclusive agreement to purchase all issued and outstanding shares of Transat A.T. Inc., with the ultimate goal of integrating the operation. The deal is not subject to financing conditions, as Air Canada states it holds all of the necessary funding to complete the transaction.
The proposed transaction is valued at approximately $520 million based on offering $13.00 per share of Transat (on a fully-diluted basis). Air Canada states the purchase will create a Montreal-based global travel services company in leisure, tourism and travel distribution operating across Canada and internationally.
“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,” continued Rovinescu. “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 the finalization of definitive agreements, confirmatory due diligence, regulatory and shareholder approvals and other closing conditions.
Headquartered in Montreal since 1949, Air Canada employs 36,000 people globally, with close to 10,000 of those in the province of Quebec where it has created more than 2,600 new jobs over the last five years. Air Canada serves 11 airports across Quebec.
Also based in Montreal, Air Transat is a 32-year-old operation employing around 3,000 people. It currently flies to approximately 60 destinations, in more than 25 countries in the Americas and Europe, as well as within Canada. It carried approximately five million passengers last year.