Air Canada signed a preliminary agreement Thursday to acquire all of Montreal-based leisure travel company Transat, the Canadian flag carrier announced. Air Canada said it controls all the needed funding to complete the transaction, valued at some $520 million or $13 per share of the parent company of rival airline Air Transat.
“A combination with Transat represents a great opportunity for stakeholders of both companies,” said Air Canada president and CEO Calin Rovinescu. “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 travelers, who will benefit from the merged company's enhanced ability to participate as a leader in the highly competitive leisure travel market globally.”
Rovinescu added that the acquisition of Air Transat would allow Air Canada to further develop its hub at Montreal Trudeau International Airport, where the flag carrier has added 35 new routes since 2012.
The transaction remains subject to regulatory and shareholder approvals and other customary closing conditions. Air Canada said it would make no further announcements related to the acquisition plan until signing the final agreements unless required by law. Air Canada has retained Morgan Stanley as its financial advisor.