Canadian airline WestJet has agreed to a C$3.5 billion (€2.3 billion) takeover by the Onex Corporation.
In an announcement on May 13, Canada’s second-largest airline said that billionaire Gerry Schwartz’s private equity firm Onex Corporation had agreed to pay cash for the airline in a deal worth C$3.5 billion (€2.3 billion).
Toronto-based Onex Corporation approached the Calgary-based airline in March with the proposal unanimously backed by the carrier’s board of directors.
The deal includes an undisclosed amount of debt held by the airline.
The airline’s board said the deal was “in the best interests of WestJet” and called on shareholders to approve it during a special meeting in July.
The approval is very likely as Onex is offering C$31 per share, which is a 67% premium over the closing share price on May 10.
“Since our first flight in 1996, WestJet has been singularly focused on providing better options for the Canadian travelling public and this transaction retains that commitment,” said Clive Beddoe, WestJet’s founder and chairman.
“I am particularly pleased that WestJet will remain headquartered in Calgary and will continue to build on the success that our 14,000 WestJetters have created. Onex’s aerospace experience, history of positive employee relations and long-term orientation makes it an ideal partner for WestJetters, and I am excited about our future.”
In addition to investment in the aerospace industry, the equity firm had previously attempted to acquire Air Canada in 1999 in a hostile bid, but that deal was abandoned.
Strong dynamic brand
“WestJet is one of Canada’s strongest brands and we have tremendous respect for the business that Clive Beddoe and all WestJetters have built over the years,” said Tawfiq Popatia, an Onex managing director.
Ed Sims, WestJet’s president and CEO said, “We are delighted to continue the journey of building an airline based on a growing network, providing competitive airfares and more choice to, from and within Canada, for communities large and small.”
WestJet is currently making the move from being a budget carrier to becoming a more diverse airline. It has introduced a business class cabin on a new fleet of Boeing 787s. The WestJet group also includes the ultra-low-cost carrier Swoop, which began flying last summer.