- Air Canada announced its intention to spend $520 million buying Transat AT, which runs rival airline Air Transat.
- It announced on Thursday that it will merge the two companies, while still keeping the Transat brands, to create a “global leader in leisure, tourism and travel distribution.”
- The CEOs of both companies say the deal, which still needs shareholder approval, is the best option for staff, customers, and shareholders.
Air Canada has announced its intention to buy rival airline Air Transat, in a deal worth around $520 million.
Air Canada announced the purchase on Thursday.
A press release said that it will buy all all issued and outstanding shares of Transat AT, which owns Air Transat, for $13 per share.
The deal still requires approval from Transat AT shareholders.
In a statement, the two companies said that the deal would create "Montreal-based global leader in leisure, tourism and travel distribution, offering Canadians choices to more destinations and promoting two-way tourism."
Transat AT has 5,000 employees and also operates a travel agency with hotel stays and vacation packages in addition to its Air Transat airline. Air Canda is one of the world's biggest airlines.
Jean-Marc Eustach, CEO of Transat said in a statement that Transat is "pleased to join forces with such a successful player in our industry." He said the deal was the best option for "employees, suppliers, partners and shareholders."
Air Canada said it will keep the Air Transat and Transat brands, and Eustach said that "Air Canada will give Transat new perspectives of growth, with the support of a strong network offering many options for connecting traffic."
Passengers can keep booking flights and all bookings with the airline will be honored, he said.
Calin Rovinescu, Air Canada's CEO, said: "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."
He said that the deal is the "best possible outcome" for both companies' shareholders, and that it will lead to growth that will lead to "increased job security for both companies' employees."
Thursday's announcement is the product of 30 days of negotiations.
If shareholders approve and no regulations get in the way, the deal will be completed by early 2020, the companies said.