Air Canada has entered into an exclusive agreement to purchase Air Transat.

The flag-carrier hopes the proposed transaction, valued at approximately $520 million or $13 per share, will create a Montreal-based global travel services company in leisure, tourism and travel distribution.

Air Canada said it had all the necessary funding required to complete the transaction which is, accordingly, not subject to financing conditions.

“A combination with Transat represents a great opportunity for stakeholders of both companies. 

“This includes the shareholders of both Transat and Air Canada, employees of both companies, who will benefit from increased job security and growth prospects, and Canadian travellers, who will benefit from the merged company’s enhanced ability to participate as a leader in the highly competitive leisure travel market globally,” said Calin Rovinescu, president and chief executive of Air Canada.

He added: “The acquisition presents a unique opportunity to compete with the very best in the world when it comes to leisure travel.

“It will also allow us to further grow our hub at Montréal-Trudeau Airport, where we have added 35 new routes since 2012 to the benefit of the Montreal and Quebec communities, and from which we carried ten million customers in 2018 alone.”

The news comes at the end of a busy week for Canadian aviation, with WestJet earlier confirming plans to go private in a $5 billion deal with Onex Corporation.

The Air Canada transaction remains subject to the finalisation of definitive agreements, confirmatory due diligence, regulatory and shareholder approvals and other closing conditions usual in this type of transaction.

Air Canada serves 11 airports across Quebec.

Since 2012, Air Canada has launched 35 new routes from Montréal-Trudeau to global markets including Shanghai, Beijing, Tokyo, Tel Aviv, Lima, Sao Paulo, and Casablanca.

This growth has allowed Montreal to rank amongst the top 50 most internationally connected cities in the world and to become one of the largest North American hubs.