Air Canada is lowering the amount of money it’s proposing to pay to buy Canadian tour operator Transat A.T.
Air Canada has slashed its price to buy Transat A.T., with the deal now worth about $188.7 million, down from $720 million, as COVID-19 weighs on travel demand, the companies said in a statement released over the weekend.
The country’s largest carrier had secured Transat shareholders’ approval for the deal last year with an $18.00 a share bid, to bolster its then thriving leisure travel business.
But with the pandemic grounding flights globally, Air Canada faced shareholder pressure to renegotiate the deal, which is still pending approval from European and Canadian regulators.
Montreal-based Air Canada, like many of its global peers, has slashed flights, suspended financial forecasts and sought government aid as the industry deals with its worst slump ever. Companies have been cancelling deals amid COVID-19 uncertainty, with aircraft parts suppliers Hexcel Corp. and Woodward Inc. abandoning their planned $6.4 billion all-stock merger in April.
Under revised terms of the deal, Air Canada said it will acquire all shares of Transat for $5 per share, representing a premium of about 30.5% to the last closing price of Transat stock.