Air Canada's deal to buy Air Transat parent is off

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Air Canada's purchase of Air Transat's parent company would have needed approval of the competition authorities at the European Commission, which it couldn't secure.
Air Canada's purchase of Air Transat's parent company would have needed approval of the competition authorities at the European Commission, which it couldn't secure.

Air Canada's planned acquisition of Quebec-based airline and tour operator Transat A.T. has fallen through.

The two parties agreed to abandon the deal after competition authorities at the European Commission (E.C.) declined to approve the merger (the deal needed the OK of the E.C. because of its potential impact on the Canada-Europe market).

Air Canada and Transat A.T., which operates the Montreal-based leisure carrier Air Transat, had originally signed off on a merger in June 2019. Terms of the deal were changed last October to reflect the diminishment in Transat A.T.'s value due to the pandemic.

Transat A.T. said it will now focus on securing long-term financing. The company needs at least $500 million in financing this year, it said.

Transat A.T. will also consider new purchase offers, including one from the Canada-based investment company Gestion MTRHP to acquire the airline and tour operator for $5 per share.

"Transat is well positioned to bounce back," CEO Jean-Marc Eustache said. "In close to 40 years of existence, we have traversed numerous crises, and each time we emerged stronger than before, demonstrating our resilience as an organization.

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