European Commission probes takeover of Transat by Ar Canada
Air Canada's Transat takeover timing extended
Transat A.T. Inc. has taken note of the European Commission’s decision to open an in-depth (“Phase 2”) investigation to assess the proposed transaction with Air Canada. Transat is currently studying the EC’s decision in order to prepare the next steps in the process.
This extension is part of the EC’s normal process of assessing the impact of transactions submitted for its approval, which is currently complicated by the COVID-19 pandemic and the impact it is having on the international commercial aviation market.
To take into account the resulting 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 is therefore 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.
It should also be noted that the transaction is subject to a public-interest assessment conducted by Transport Canada, whose report was submitted on May 1 to the Honorable Marc Garneau, Minister of Transport.
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.