MONTREAL,\u00a0April 2, 2021\u00a0<\/p>\n\n\n\n
Air Canada and Transat A.T. Inc. (“Transat”) announced today that they have mutually agreed to terminate the Arrangement Agreement for the proposed acquisition of Transat by Air Canada.<\/p>\n\n\n\n
Air Canada and Transat had originally agreed in June 2019 on the acquisition, the terms of which were subsequently amended in August 2019 and then revised in October 2020 as a result of the severe economic impact of the COVID-19 pandemic.<\/p>\n\n\n\n
As previously disclosed, the acquisition was conditional on the approval of various regulatory authorities, including the European Commission (“EC”). In order to meet that key condition, Air Canada offered and enhanced a significant package of remedies, which went beyond the commercially reasonable efforts required of Air Canada under the Arrangement Agreement\u00a0and what has been traditionally accepted by the EC in previous airline merger cases. Following recent discussions with the EC, it has become evident, however, that the EC will not approve the acquisition based on the currently offered remedy package.<\/p>\n\n\n\n
Both Air Canada and Transat have agreed to terminate\u00a0the Arrangement Agreement with\u00a0Air Canada paying Transat a termination\u00a0fee of\u00a0$12.5 million, and with Transat no longer under\u00a0any obligation to pay Air Canada any\u00a0fee should Transat be involved\u00a0in another acquisition or similar transaction in\u00a0the future.<\/p>\n\n\n