Air Canada drops Transat takeover after battle with Europe

Air Canada dropped its takeover of vacation operator Transat because it couldn’t convince European regulators to approve the deal on acceptable terms. Canada’s largest airline said it offered a “significant package of remedies” to satisfy the EC’s concerns that the merger would reduce competition on flights between EU countries and Canada. “It has become evident, however, that the EC will not approve the acquisition based on the currently offered remedy package,” Air Canada said Friday. The Montreal-based airline said “providing additional, onerous remedies, which may still not secure an EC approval, would significantly compromise Air Canada’s ability to compete internationally.” Air Canada agreed to buy Transat, one of Canada’s biggest sellers of vacation packages, in June 2019 and later raised its bid to C$18 a share to win over recalcitrant shareholders and seal a friendly deal. After the coronavirus pandemic struck, the companies agree to revise the deal to C$5 a share in cash or Air Canada stock, valuing Transat at about C$200m. Justifying its stance, the EC said the combination would have resulted in higher prices and reduced choice for travelers, adding that it wouldn’t relax merger conditions because of the pandemic. “Markets should remain dynamic and competitive when travelers will again be able to fly over the Atlantic for holidays or to visit their beloved ones,” Margrethe Vestager, the EU’s competition commissioner said.<br/>