Air Canada announced today that it has entered into an exclusive agreement with Transat A.T. Inc. (Transat) regarding the proposed purchase by Air Canada of all issued and outstanding shares of Transat and its combination with Air Canada. The proposed transaction, valued at approximately $520 million or $13.00 per share of Transat , will create a Montreal-based global travel services company in leisure, tourism and travel distribution operating across Canada and internationally. Air Canada has all the necessary funding required to complete the transaction which is accordingly not subject to financing conditions.

Transat offers vacation packages, hotel stays and air travel under the Transat and Air Transat brands to about 60 destinations in the Americas and Europe. Transat said its operations will continue as normal, and that there will be no change for travellers.

“A combination with Transat represents a great opportunity for stakeholders of both companies.  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 travellers, 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,” said Calin Rovinescu, President and Chief Executive of Air Canada said in the press release.

The news comes two weeks after Transat said it was in talks with multiple unnamed parties about a possible takeover, and in the same week Air Canada rival WestJet Airlines Ltd. said it would be acquired by private equity firm Onex Corp. and taken private.