Following the vote on Air Canada's bid for Transat by Transat's shareholders on Aug. 23, the Minister of Transport has determined that the transaction raises public interest issues related to national transportation. As such, a public interest assessment of the proposed transaction will be conducted with input from the Commissioner of Competition, who will assess impacts on competition.
On Aug. 12, 2019, Air Canada agreed to increase the purchase price for the acquisition of all issued and outstanding shares of Transat, from $13 to $18 per share, representing a $720M transaction.
The public interest assessment will include targeted consultations with the air industry and other stakeholders, other levels of government and the public, as well as an analysis of the economic benefits or challenges resulting from the proposed transaction. Consultation will begin on Nov. 4, 2019.
Under the Canada Transportation Act, Transport Canada has up to 150 days to complete this public interest assessment. However, the Minister has the authority to grant an extension should extra time be necessary. Considering the size and scope of the proposed transaction, an extra 100 days has been granted to both Transport Canada and the Commissioner of Competition, to ensure sufficient time for thorough analysis and assessment.
The Department now has 250 days (until May 2, 2020) to complete the public interest assessment and provide it to the Minister. The Minister would then provide a recommendation to the Governor in Council (Cabinet) concerning the proposed purchase. The Minister's recommendation would incorporate the findings of the Commissioner's report on competition considerations.
There is no legislated timeline for the Minister to make his recommendation or for the Governor in Council to make a final decision.
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