Air Canada is looking to buy rival Transat AT Inc. for about $520 million.
READ MORE: Air Canada offers deal to purchase Transat
The country’s largest airline would pay a premium price of $13 per share for Transat, the Montreal-based owner of Air Transat and numerous vacation travel businesses.
In morning trading, Transat shares rose about 15 per cent to $12.14 while Air Canada stock gained nearly three per cent to $40, which is above the previous all-time high set Wednesday at $39.16.
— Yahoo Finance Canada (@YahooFinanceCA) May 16, 2019
McGill University professor Karl Moore says a combination of the two companies would help grow Air Canada Vacations, which competes with Transat, WestJet and others in the leisure travel market.
He believes that Transat is going to be in better shape because of the potential of being bought by Air Canada.
Moore also says a deal that keeps Transat’s head office in Montreal would also be greeted favourably by politicians in Quebec, just as Alberta politicians said they want to see WestJet headquarters remain in Calgary if it’s bought by Onex.
Moore said the level of competition that Air Canada faces from WestJet will increase with the financial resources of Onex.