Air Canada and Transat AT Inc reported Friday that they have mutually agreed to terminate Air Canada’s proposed acquisition of Transat, after the European Commission informed them that it would not approve the transaction.
Air Canada said that following recent discussions with the European Commission (EC), it has become clear that the EC will not approve the acquisition on the basis of the remedy package offered.
See also: Korean Air’s Asiana Airlines Merger Delayed Until 2024.
In February, Air Canada refused to extend the deadline for its C$188.7 million ($150.19 million) deal for Transat after European regulators failed to give the go-ahead for the purchase.
The two companies had agreed in June 2019 to 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.
Air Canada has agreed to pay a severance payment of C$12.5 million to Transat.
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