BUSINESS
05/16/2019 08:38 EDT | Updated 05/16/2019 09:12 EDT

Air Canada To Buy Transat In $520-Million Cash Deal

The news comes days after Onex Corp. bought WestJet.

The Canadian Press

(Reuters) — Air Canada said on Thursday it is in talks to buy Canadian tour operator Transat A.T. Inc in an all-cash deal valued at $520 million as the airline looks to create a Montreal-based global travel services company.

Transat said it has agreed to a 30-day period of negotiations with Air Canada to finalize a deal. As part of the deal, Transat shareholders will receive $13 per share, a premium of 23 per cent to its Wednesday close.

Watch: What to know about Onex, WestJet’s new owner. Story continues below.

 

The deal allows Air Canada to expand its hub at Montréal-Trudeau Airport, where it has added 35 new routes since 2012, said Chief Executive Officer Calin Rovinescu in a statement.

The deal comes days after WestJet Airlines received a $3.5-billion buyout offer from billionaire Gerry Schwartz’s private equity firm Onex Corp.

Shares of Air Canada have risen 49.8 per cent so far this year, while those of Transat have jumped 78 per cent in this period on the Toronto Stock Exchange.

(Reporting by Shanti S Nair in Bengaluru; Editing by Arun Koyyur)