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Johnboy

Air Canada To Purchase Air Transat

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On 8/12/2019 at 9:38 AM, rudder said:

I have no doubt the non-core asset sale will begin immediately after closing.

AC is not in the hotel business.

True but a majority of rouge flying is leisure destinations where you need hotel rooms. Once you have control of that inventory it’s makes life difficult for the competition. Whoever that will be. 

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https://www.newswire.ca/news-releases/transat-s-shareholders-overwhelmingly-approve-the-arrangement-with-air-canada-860941611.html

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Air Canada Welcomes Transat Shareholders Approval
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MONTREAL, Aug. 23, 2019 /CNW Telbec/ - Air Canada is pleased by the announcement, earlier today, by Transat A.T. Inc. ("Transat") of the approval, by a majority of nearly 95% of its shareholders, of its Arrangement Agreement with Air Canada under which Air Canada will acquire all its issued and outstanding shares.

"We are pleased with the outcome of Transat's special meeting and grateful to Transat shareholders for this overwhelming show of support," said Calin Rovinescu, President and Chief Executive Officer of Air Canada. "We will build a combined company greater than the sum of its parts that we can all be proud of.  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." 

"This is the best possible outcome for all stakeholders," added Mr. 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 plans to preserve the Transat and Air Transat brands and maintain the Transat head office and its key functions in Montreal. Travellers will benefit from the combined companies' enhanced capabilities in the highly competitive, global leisure travel market and from access to new destinations, more connecting traffic and increased frequencies. 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."

Plan of Arrangement

The acquisition will proceed by way of a court-approved plan of arrangement pursuant to the Canada Business Corporations Act. The transaction remains subject to court and regulatory approvals and the other closing conditions set out in the Arrangement Agreement. If such approvals are obtained and conditions are met, the transaction is expected to be completed in early 2020. Further details regarding the transaction are provided in Transat's management proxy circular for the special meeting of shareholders and in the Arrangement Agreement and the Amending Agreement entered into between Air Canada and Transat, copies of which are available on SEDAR at www.sedar.com.

 

 

Edited by dagger
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Hmmm I wonder who will benefit from this, the public or perhaps certain opposing groups.

Transport Canada to conduct a public interest assessment regarding proposed purchase of Transat A.T. Inc. by Air Canada Français

 


News provided by

Transport Canada

Aug 26, 2019, 17:26 ET

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OTTAWA, Aug. 26, 2019 /CNW/ - On July 17, Air Canada and Transat A.T. Inc. notified the Honourable Marc Garneau, Minister of Transport, of a proposed transaction whereby Air Canada would acquire Transat A.T. Inc. This notification was in accordance with the mergers and acquisitions provisions of the Canada Transportation Act.

The Minister of Transport has determined that the transaction raises public interest issues related to national transportation. As such, a public interest assessment of the proposed transaction will be conducted with input from the Commissioner of Competition, who will assess impacts on competition.

The public interest assessment will include targeted consultations with the air industry and other stakeholders, other levels of government and the public, as well as an analysis of the economic benefits or challenges resulting from the proposed transaction. Consultation will begin on November 4, 2019.

Under the Canada Transportation Act, Transport Canada has up to 150 days to complete this public interest assessment. However, the Minister has the authority to grant an extension should extra time be necessary. Considering the size and scope of the proposed transaction, an extra 100 days has been granted to both Transport Canada and the Commissioner of Competition, to ensure sufficient time for thorough analysis and assessment.

The Department now has 250 days (until May 2, 2020) to complete the public interest assessment and provide it to the Minister. The Minister would then provide a recommendation to the Governor in Council (Cabinet) concerning the proposed purchase. The Minister's recommendation would incorporate the findings of the Commissioner's report on competition considerations. There is no legislated timeline for the Minister to make his recommendation or for the Governor in Council to make a final decision.

Transport Canada is online at www.tc.gc.ca. Subscribe to e-news or stay connected through Twitter, Facebook, YouTube and Instagram to keep up to date on the latest from Transport Canada.

This news release may be made available in alternative formats for persons living with visual disabilities.

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.

Air Canada’s Transat takeover looks shakier than ever to investors

Tue Aug 27, 2019 - Bloomberg News

After battling a rival bid, Transat A.T. and Air Canada Inc. now have one more thing to worry about. The gap between Transat’s share price and Air Canada’s takeover bid is sitting at the widest ever — indicating investors aren’t confident the deal will get done.

Canada’s transport minister Marc Garneau said Monday that officials need until May to review the proposed acquisition in order to ascertain whether the deal is in the best interest of the public.

Transat’s stock closed Monday at $15.97 (US$12.07), more than $2 below Air Canada’s offer of $18 a share or $720 million. That was raised earlier this month from $13 in an attempt to fend off an unsolicited bid from Group Mach Inc., a Quebec real-estate developer, that’s offered to buy at least one-fifth of Transat for $14 a share.

The tour operator’s shareholders voted 95 per cent in favour of the Air Canada bid last Friday. It’s now subject to other closing conditions, including approval under the Canadian Competition Act, the Canada Transportation Act and European Council regulations.

The competition review is anticipated “to be the most strenuous given the overlap of the companies in Montreal and Quebec markets,” AltaCorp Capital analyst Chris Murray said in a recent note. “The upcoming federal election could also expose the transaction to heightened levels of political discourse, which could make regulators reticent to approve relevant reviews.”

However, Murray said he believes the deal will ultimately get the required approvals and will close by 2020.

Scotiabank analyst Konark Gupta agreed that the deal will eventually get done but added that the “Competition Act approval could be relatively more tedious compared to other regulatory and government approvals” due to substantial overlap between the two companies in sun destinations and transatlantic markets.

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The government really needs to keep its nose out of private enterprise.

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11 hours ago, boestar said:

The government really needs to keep its nose out of private enterprise.

Having 60% of the Transatlantic market and more than 90% market share of the market among Canadian Airlines doesn’t seem like it would be in the public interest. AC thinking they could roll this through easily seems somewhat misguided. The end result isn’t going to be what AC thought they were buying so it’ll be interesting to see if they follow through on the share offering if they are forced to divest some assets. 

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17 minutes ago, Jumpy said:

Having 60% of the Transatlantic market and more than 90% market share of the market among Canadian Airlines doesn’t seem like it would be in the public interest. AC thinking they could roll this through easily seems somewhat misguided. The end result isn’t going to be what AC thought they were buying so it’ll be interesting to see if they follow through on the share offering if they are forced to divest some assets. 

If they don't get to buy Transat, who will? swoop, WestJet . Porter or perhaps some Quebec Hotel firm.???????A Real look or just a way to garner more votes from Quebec????  

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Transat Announces Receipt of Final Court Approval for the Transaction with Air Canada


News provided by

Transat A.T. Inc.

Aug 29, 2019, 08:11 ET

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MONTREAL, Aug. 29, 2019 /CNW Telbec/ - Transat A.T. Inc. ("Transat") today announced that the Superior Court of Quebec has issued a final order approving the previously announced plan of arrangement with Air Canada (the "Arrangement"). The Arrangement was also approved by 94.77% of shareholders present in person or by proxy at the special meeting of Transat held on August 23, 2019.

The Arrangement is still subject to certain closing conditions, including regulatory approvals described in Transat's management information circular dated July 19, 2019, as well as other customary closing conditions. In addition, a public interest assessment regarding the Arrangement is being undertaken by Transport Canada with input from the Commissioner of Competition.  If the required regulatory approvals are obtained and conditions are met, it is now expected that the transaction will be completed by the second quarter 2020.

Further information regarding the Arrangement is provided in the managem²ent information circular dated July 19, 2019.

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60% is far from a monopoly.  Any other airline can apply for the routes should they so desire.  AC has the ability to feed them properly.

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IMHO, there's not a snowball's chance in Hades that the purchase will be denied. However, anyone who believes that keeping TS as a separate entity for all time is failing to learn the lessons of history.

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On the contrary this deal while it serves Air Canada really well, is not in the best interest of the public and competition, and any government would find it very difficult to approve it without mandating major divesture and restrictions in routes, gates, and Aeroplan to name a few. Its approval is tantamount to political suicide for any government especially when there are other options including other suitors and status quo.

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AC says that they will retain Transat as a separate entity. I'm curious as to how that will work. It doesn't make a lot of sense to me not to merge Transat into Air Canada and operate them as part of AC Vacations. Another option I suppose would be to move some AC aircraft into Transat and move AC Vactions to Transat. Anybody have any insights regarding this?

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6 hours ago, GDR said:

AC says that they will retain Transat as a separate entity. 

Back in the day....... AC said the same thing about CDN and look how long that lasted? Might be kept as a separate by merging it into Rouge? Just musing 😉

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22 hours ago, Jumpy said:

Having 60% of the Transatlantic market and more than 90% market share of the market among Canadian Airlines doesn’t seem like it would be in the public interest. AC thinking they could roll this through easily seems somewhat misguided. The end result isn’t going to be what AC thought they were buying so it’ll be interesting to see if they follow through on the share offering if they are forced to divest some assets. 

This is not a pure Competition Tribunal public interest assessment, the report goes to the Transport Minister where a political decision will be made.

Unless WS comes to the table with significant commitment to fly YUL or YYZ international and truly replace Transat flying flight for flight, route for route; the TC Minister is going to approve the takeover. 

WestJet won't take the A310 or A321 and they appear finished with purchasing more 763s. This leaves redeploying the additional 7 Dreamliners they have on order. If WestJet enterred into an agreement to increase competition, they would have to deploy the Dreamliner onto such great routes as YYZ to CDG/AMS/FCO/AGP on a year round basis. Additionally they would have to put the Dreamliner onto YUL runs. This would significantly and negatively impact the strategic plan as it would push back Asia operations a good 2-3 years. 

I expect that AC will have to give up some slots and gates in YYZ, but probably not much else. Maybe YUL to sun destinations for Sunwing to takeover with additional frequencies. 

IMHO the public interest assessment is driven by a desire to paper the takeover as much as possible for the Americans and Europeans. This keeps Canada in control. Minimal repercussions to AC because anything less will put QC jobs at risk. 

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26 minutes ago, Kasey said:

Back in the day....... AC said the same thing about CDN and look how long that lasted? Might be kept as a separate by merging it into Rouge? Just musing 😉

The TransAt YYZ operation that must remain in T3 (because not everything can come into T1) will be separate for operational purposes. I can see TransAt Holidays remaining separate. 

YUL has a phenomenal opportunity to integrate everything into AC and AC Rouge as the airport would become a crown jewel fortress hub for TransAtlantic operations.

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Back in the day when Air Canada bought and assimilated Canadian, similar arguments were used, except they were even more compelling, Canadian was on the verge of collapsing, the deal was to save jobs, etc. etc. It makes little difference to competition bureau. 

This time the argument is not even compelling, Transat is a going concern and has other options. Conditions and restrictions will be put on this deal which either will either sour the milk enough that Air Canada will walk away, or concessions will have to be made, such as giving up T3 gates and space, opening Aeroplan, giving up routes, etc.

During their last rule, Liberals said no to co-signing a loan for Canada 3000 which caused its bankruptcy, and then bailed out Air Canada (their competitors). This time too, at the start of their rule, the Liberals undemocratically killed the discussions and studies for Toronto City airport, again eliminating competition for Air Canada. With such strong appearance of bias for Air Canada, the Liberals cannot risk another obsolescence by going easy on this deal, especially after recent allegations of corruption.

 

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