MONTREAL — Transat A.T. has responded to yesterday’s news that the European Commission is launching an in-depth investigation into its proposed transaction with Air Canada.
According to Transat, which is currently studying the EC’s decision in order to prepare for next steps, the extension is part of the EC’s normal process of assessing the impact of transactions submitted for its approval. The process, says Transat, is currently being complicated by the COVID-19 pandemic and the impact it’s having on the international commercial aviation market.
As a result of longer delays, Transat has informed Air Canada of its decision to activate the first one-month extension of the outside date set for the transaction, provided for in the ‘Arrangement Agreement.’ It has been postponed for the time being to July 27, 2020, from June 27.
The Arrangement Agreement provides for the possibility of postponing the deadline for three one-month periods simply by notification from one of the parties, and then for three additional periods under certain conditions.
The transaction is also subject to a public-interest assessment conducted by Transport Canada, whose report was submitted on May 1 to Canada’s Minister of Transport, Marc Garneau.
If the required approvals are obtained and the conditions satisfied, the arrangement is now expected to close early in the fourth quarter of the 2020 calendar year.
First announced in May 2019, the Air Canada-Transat deal could see Air Canada acquiring Transat for $520 million.