TS Shareholders Have Spoken: Now The Regulators Have Their Say
Bruce Parkinson, Open Jaw
Air Canada CEO Calin Rovinescu says the combined resources of AC and Transat will be used to “build a combined company greater than the sum of its parts that we can all be proud of.”
On Friday, a majority of nearly 95% of Transat shareholders voted to approve the company’s ‘Arrangement Agreement’ with Air Canada under which AC will acquire all its issued and outstanding shares.
“We now look forward to engaging with Transport Canada and the Competition Bureau to secure the required approvals to complete the transaction and welcome the opportunity to demonstrate the many benefits it will bring," Rovinescu added.
How much AC is “looking forward” to the approval process is debatable. The deal is expected to receive intense regulatory scrutiny. Before being approved, it will have to satisfy several parties, including Superior Court of Québec, the Competition Bureau of Canada and the European Union Council.
The leaders of the two companies stressed what they see as the benefits of the merger.
Jean-Marc Eustache, President and Chief Executive Officer of Transat, says the agreement “will create a Montreal-based travel leader, able to compete on a global scale." He added: "This transformative transaction will create long-term benefits for our employees, travellers and communities, all the while providing significant value for our shareholders."
"This is the best possible outcome for all stakeholders," said AC’s Rovinescu. "For shareholders of Transat and Air Canada, the combination delivers excellent value, while also providing increased job security for both companies' employees through greater growth prospects.”
Air Canada has pledged to preserve the Transat and Air Transat brands and maintain the Transat head office and its key functions in Montreal.
“Customers and the Quebec economy will derive maximum advantage of having a Montreal-based, growth-oriented global champion in aviation, the world's most international business, spurring more employment and securing Montreal's position as a leader among world aviation centres," said Rovinescu.
One Transat board member said he was confident of ultimate regulatory approval. A decision is not expected to come before early 2020.
"Today, we are very confident that we will get the approval of these different regulatory authorities," Jean-Yves Leblanc said at a news conference. He says his optimism is based on intelligence from "the best advisers that we can have on this planet."
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.