The Canadian Government has approved the proposed acquisition of integrated international tourism company Transat by flag carrier Air Canada.

Last October, Air Canada announced amendments to the previously disclosed acquisition transaction with Transat.

As part of the acquisition agreement, Air Canada will buy all the shares of Transat for $5.00 a share at a discounted C$188.7m ($149m), which is payable at the option of Transat shareholders in cash or shares of Air Canada.

Air Canada agrees to ensure effective competition and public interest benefits that include maintaining a Transat head office in Québec.

The carrier will also preserve jobs and the Transat brand, as well as expand operations with the addition of new routes.

Transat board of directors special committee chair Jean-Yves Leblanc said: “We are currently working on adjusting all of the deadlines, including our financing agreements, in order to align them with the anticipated completion of the Commission’s review process.”

The deal is subject to approval from the EU, which suspended its investigation into the acquisition on 22 December.

Meanwhile, carrier WestJet said the deal will increase fares and repress competition.

WestJet president and CEO said Ed Sims said: “This decision shows a blatant disregard for all Canadians who believe in healthy competition. When Canadians look to explore the world and reunite with family and friends once again, they will face fewer choices and higher fares.

“This is a serious setback to Canada’s economy. The Competition Bureau themselves described such cosmetic remedies as inadequate. Canadians should be profoundly disappointed.”