Air Canada Enters Exclusive Agreement to Buy Transat
by Daine Taylor /
Air Canada announced today that it has entered into an exclusive agreement to purchase Transat A.T. Inc. (Transat), a leading integrated international tourism company specializing in holiday travel. The agreement guarantees a 30-day period of exclusive negotiations between Air Canada and Transat.
The proposed transaction, valued at $13 per share or around $520 million, will create a Montreal-based global travel giant, providing services in leisure, tourism and travel distribution across Canada and internationally.
"This announcement is good news for Transat," said Jean-Marc Eustache, president and chief executive officer of Transat. "This is an opportunity to team up with a great company that knows and understands our industry and has had undisputable success in the travel business. This represents the best prospect for not only maintaining, but growing, over the long term the business and jobs that Transat has been developing in Quebec and elsewhere for more than 30 years."
At this point, the transaction is not finalized, and is still subject to changes, regulatory and shareholder approvals, and other closing conditions. The two airline companies are still in the early stages of negotiation, and there is no assurance that the transaction will be completed at all.
According to a press statement, no further announcements are expected to be made by Air Canada until the signature of the definitive agreements, unless required by law.
Combination of the two respected Quebec-based aviation and travel brands will create a new global leader in leisure, tourism and travel distribution, offering Canadians more options for destinations and promoting two-way tourism.
"A combination with Transat represents a great opportunity for stakeholders of both companies,” said Calin Rovinescu, president and chief executive of Air Canada, in a press release. “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.
“The acquisition presents a unique opportunity to compete with the very best in the world when it comes to leisure travel. 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."
Transat announced that its operations will continue normally, and there will be no change for its clients, suppliers and employees. In particular, travelers and clients of Transat can continue to travel and book their vacation packages with Transat like before.