Montreal-based flag carrier airline Air Canada has concluded an amended transaction in relation to a planned merger with tour operator Transat. 

As part of the binding agreement, Air Canada will acquire all shares of Transat for C$5.00 (43.81) per share, payable at the option of Transat shareholders in cash or shares of Air Canada at a fixed exchange ratio of 0.2862 Air Canada shares for each Transat share.

The transaction, which is valued at approximately $190m ($144m), received unanimous approval from the Board of Directors of Transat.  

Air Canada president and chief executive officer Calin Rovinescu said: ”Covid-19 has had a devastating effect on the global airline industry, with a material impact on the value of airlines and aviation assets.  

Nonetheless, Air Canada intends to complete its acquisition of Transat, at a reduced price and on modified terms.   

“This combination will provide stability for Transat’s operations and its stakeholders and will position Air Canada, and indeed the Canadian aviation industry, to emerge more strongly as we enter the post-Covid-19 world.” 

The transaction is subject to the approval of shareholders, court, the Toronto Stock Exchange, certain customary and other conditions, as well as regulatory approvals. 

The approval of regulatory authorities in Canada and the EU is currently in progress.  

It is expected to be completed in late January or early February 2021. 

Last month, Air Canada concluded two longer-term refinancing transactions worth approximately C$1.52bn ($1.13bn).