Air Canada’s purchase of tour operator Transat AT, which owns Air Transat, has been pushed back into the fourth quarter of this year due to “certain factors beyond its control and related to the COVID-19 pandemic.”
The C$720m (£421m) buyout was approved by shareholders in August last year and remains subject to regulatory approval in Canada and the European Union. The completion of the transaction is thought to have been delayed due the decision by the European Commission to open and in-depth investigation to assess the purchase. According to a statement from Transat, the review is a “normal process” to examine the impact of mergers and “is currently being complicated by the COVID 19 pandemic”.
Despite this, the corporation said it “remains firmly committed to completing the transaction with Air Canada”. The company said the “complete transformation” of the industry due to the pandemic could impact its ability to reach an agreement with regulatory authorities regarding appropriate concessions aimed at obtaining the necessary approvals.
It warned that the crisis could force it to take certain measures to secure additional financing that would put it in breach of the agreement it has already signed with Air Canada.
However, if required approvals are obtained and contract conditions are met, the firm now expects to complete the transaction in the fourth quarter of this year. Under the agreement, the deadline for receiving regulatory authorisations cannot be extended beyond December 27, 2020.