Private equity firm Onex has signed a definitive agreement to acquire outstanding shares of Canada’s WestJet Airlines in a C$5bn ($3.71bn) deal, including assumed debt.

According to the agreement, WestJet shareholders will be entitled to receive C$31 ($23.04) a share in cash from Onex and its affiliated funds.

Following the completion of the deal, the Canadian airline will operate as a privately held company.

The WestJet purchase will be led by Onex Partners, Onex’s private equity platform focused on larger investment opportunities.

WestJet Airlines founder and chairman Clive Beddoe said: “Since our first flight in 1996, WestJet has been singularly focused on providing better options for the Canadian travelling public and this transaction retains that commitment.

“Onex’s aerospace experience, history of positive employee relations and long-term orientation make it an ideal partner for WestJetters, and I am excited about our future.”

The airline will continue to be headquartered in Calgary post-completion of the transaction.

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“WestJet has been singularly focused on providing better options for the Canadian travelling public and this transaction retains that commitment.”

Onex made the offer in March. WestJet formed a committee in the wake of the takeover bid to review and submit recommendations.

Acting upon the recommendations, the WestJet board of directors determined that the transaction is ‘in the best interests of the company’ and urged shareholders to vote in favour of the transaction.

A special meeting of shareholders is scheduled to be conducted in July to seek approval for the deal.

The proposed acquisition is subject to closing conditions, including court and shareholder approval and receipt of certain regulatory approvals, and is anticipated to be completed in the latter part of this year or early 2020.

WestJet president and CEO Ed Sims said: “We are delighted to continue the journey of building an airline based on a growing network, providing competitive airfares and more choice to, from and within Canada, for communities large and small.”

WestJet was initially a low-cost airline with an all-737 fleet but has purchased longer-range Boeing aircraft such as the 787 Dreamliner to expand its footprint into overseas markets.

Its first 787 jetliner was obtained earlier this year.