All rights reserved. Readers can also interact with The Globe on Facebook and Twitter . Thus, they are recommending that Transat shareholders vote in favor of the transaction. Air Canada and Transat AT would overlap on certain sun destinations in addition to having a grip on air travel in Montreal. We've sent an email with instructions to create a new password. Enter your email address to get a new one. Please log in to listen to this story. Sign up to our daily aviation news digest. European regulators had decided to take a deeper look into the deal after raising concerns that the combination could lead to higher prices and lower supply. While this further solidifies the notion of a loose duopoly in the Canadian market (Air Canada and WestJet), consolidation of airlines is much needed during this downturn in travel. Despite the global health crisis, Canada’s largest carrier, Air Canada is continuing the process of acquiring issued and outstanding shares of Canadian leisure carrier Air Transat. Enter your email below and we'll send you another email. Air Canada's deal to buy Transat AT, if it clears regulatory hurdles and wins approval from Transat shareholders, could proceed in early 2021. Follow these easy steps to disable AdBlock, Follow these easy steps to disable AdBlock Plus, Follow these easy steps to disable uBlock Origin, Follow these easy steps to disable uBlock, New Airline Or Elaborate Hoax? The agreed-upon price is one that is reasonable for both parties, according to Karl Moore, a professor in McGill University’s Desautels Faculty of Management, who said the deal would never have closed at the original $18 share price.

{* legalAcceptanceAcceptButton *}, {* backButton *}

Currently based in Vilnius, Lithuania. Click here to subscribe.

The estimated takeover value sits at $190 million, significantly down from the previous $720 million. {* createAccountButton *}, You may have created a profile with another. This report by The Canadian Press was first published Nov. 6, 2020. It must be approved by two-thirds Transat’s shareholders, who will vote in an extraordinary assembly in early December. You have activated your account, please feel free to browse our exclusive contests, videos and content. The amended transaction was put forward due to the severe impact of COVID-19 on the global air transport industry, as reiterated by Air Canada’s CEO. Welcome to The Globe and Mail’s comment community. The European Commission’s antitrust body, which is investigating the proposed merger, has not indicated whether it would give the green light. Before the pandemic, the transaction would have allowed the group to hold a 60-per-cent share of the transatlantic market from Canada. The estimated takeover value sits at $190 million, significantly down from the previous $720 million.

Should this deal between Air Canada and Air Transat go through? Please contact us. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Transat shares closed at $3.83 on Friday. Let us know your thoughts in the comments. Iceland’s MOM Air Startup, What To Expect From GOL And Avianca’s Expanded Codeshare Agreement, Flight Operations Suspended At Van Nuys After Car Ends Up On Runway, ANA Takes Delivery Of 2020’s First Airbus A380. “We can no longer refer to the conditions that prevailed before the health crisis,” Prof. Moore said in a phone interview. In March, the Competition Bureau of Canada also had a negative reception to the transaction, but its analysis was conducted before the outbreak of the pandemic. Thank you for your patience. Full Disclaimer. It should be noted that this transaction remains subject to various levels of approval, including the following: “If such approvals are obtained, and conditions are met, the transaction is expected to be completed in late January or early February 2021,” the carrier notes. I'm a print subscriber, link to my account, Avoid the use of toxic and offensive language. We aim to create a safe and valuable space for discussion and debate. Be the first to know! Degree educated with a wealth of traveling history, Chris’ insight into routes, networks, and alliances brings a depth of quality to his work that is hard to beat. Deputy Editor - An experienced photographer and video producer, Chris is a journalistic natural. An error has occurred while trying to update your details. This report by The Canadian Press was first published Oct. 10, 2020. Air Canada and Transat would overlap on certain sun destinations in addition to having a grip on air travel in Montreal. “COVID-19 has had a devastating effect on the global airline industry, with a material impact on the value of airlines and aviation assets. Welcome to The Globe and Mail’s comment community. This translation has been automatically generated and has not been verified for accuracy. The deadline to secure the regulatory approvals has been pushed from late December to Feb. 15. Air Canada said in a news release that the pandemic has had a devastating effect on the aviation industry and the value of airlines and their assets, but it still wants to proceed with the acquisition “at a reduced price and on modified terms.”. By checking this box, I agree to the terms of service and privacy policy of Rogers Media. On Saturday, the company did not indicate whether its major shareholders, which include Letko Brosseau, the Fonds de solidarité FTQ and Quebec’s pension fund manger, the Caisse de dépôt et placement du Québec, supported the deal. 2440 Ash St. Vancouver, BC V5Z 4J6 © 1996-2020 Rogers Media. The European Commission’s preliminary analysis notably pointed out that competition could diminish on 33 routes between Canada and Europe if Air Canada acquires Transat. Rogers Media uses cookies for personalization, to customize its online advertisements, and for other purposes. Also available in French and Mandarin. His strong relationships with Middle Eastern and Canadian airlines make him an asset to the team. Audio for this article is not available at this time. In addition to a sharp downward revision of the value to $190 million from $720 million, the deadline for the sale initially set for Dec. 27 was postponed to Feb. 15. 351 King Street East, Suite 1600, Toronto, ON Canada, M5A 0N1, Unchecking box will stop auto data updates, Due to technical reasons, we have temporarily removed commenting from our articles.

This proposal will be the subject of another vote and must obtain the support of at least two-thirds of the holders of Transat A. T. securities at a meeting scheduled for Dec. 15. Please Support us by turning off your adblocker. {* backButton *} Read our. © Copyright 2020 The Globe and Mail Inc. All rights reserved. And regulatory approvals, including from Transport Canada and the European Union. In March, the Competition Bureau of Canada also had a negative reception to the transaction, but its analysis was conducted before the outbreak of the pandemic. Send me promotions, surveys and info from NEWS 1130 and other Rogers brands. Sorry we could not verify that email address.

The deal is endorsed by Transat’s board of directors and would allow shareholders to be paid in either cash or Air Canada shares. The two companies announced Saturday they’d agreed on revised terms that would see Air Canada pay $5 a share for the parent company of Air Transat, compared with the $18 a share originally pledged in its takeover bid. Please confirm the information below before signing up.

Air Canada and Transat would overlap on certain sun destinations in addition to having a grip on air travel in Montreal. The Transat Board of Directors has unanimously determined that this amended transaction is in the best interests of the airline and its stakeholders. Be in the know. If you are looking to give feedback on our new site, please send it along to, To view this site properly, enable cookies in your browser. Canada’s largest airline is now offering $5 for each share of the Quebec tour operator, compared with $18 previously. If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Nonetheless, Air Canada intends to complete its acquisition of Transat, at a reduced price and on modified terms…This combination will provide stability for Transat’s operations and its stakeholders and will position Air Canada, and indeed the Canadian aviation industry, to emerge more strongly as we enter the post-COVID-19 world.” -Calin Rovinescu, President and Chief Executive Officer of Air Canada. As many have noted, this is far below the $18 per share initially offered with the original acquisition plan of August 2019. Get breaking news, weather and traffic stories in your inbox 7 days a week, 24 hours a day. Do you think the consolidation of major airlines in light of COVID-19 and its impact on aviation is necessary and inevitable? We didn't recognize that password reset code. {* traditionalSignIn_signInButton *}, {* backButton *} Send me alerts, event notifications and special deals or information from our carefully screened partners that may be of interest to me. “This is the worst crisis since the founding of Transat 33 years ago, and with a second wave of the pandemic underway, the timing of an eventual recovery remains uncertain,” Transat president and chief executive Jean-Marc Eustache said in a statement. “The aviation industry is in the darkest period in its history.”. Air Canada will have to pay Transat a $30-million break fee if it terminates the deal, while Transat will have to pay $10-million if it accepts a firm offer of $6 a share or better that is not matched by Air Canada. That brings the total price of the takeover to $190-million, down from $720-million previously. Companies in this story: (TSX:TRZ, TSX:AC). As many have noted, this is far below the $18 per share initially offered with the original acquisition plan of August 2019. In the absence of any last-minute surprises, each of Transat’s board of directors is expected to vote in favor of the deal – having committed to voting in affirmation of the acquisition. The $5-a-share purchase price represents a 31.6-per-cent premium over the stock’s 20-day weighed average. The announcement today marks the conclusion of an “amended transaction with Transat A.T. Inc. that provides for Air Canada to acquire all issued and outstanding shares of Transat and for its combination with Air Canada.”. The European Commission’s preliminary analysis notably pointed out that competition could diminish on 33 routes between Canada and Europe if Air Canada acquires Transat. The federal government has yet to give its blessing to the takeover. “More than ever, having a national airline with the scale to weather current industry turbulence, which is expected to continue for several years, is in the best interests of our shareholders, customers, employees and other stakeholders.”.