Transat Seeks to Allay Antitrust Issues in Air Canada Reviews
(Bloomberg) -- Transat AT Inc. told shareholders it’s seeking to allay antitrust issues pinpointed by the European Union over its takeover by Air Canada and hopes to win approval by February.
The company said in a letter dated Nov. 12 that it’s working with Air Canada “to address the concerns raised” by the European Commission in a so-called statement of objections sent late September.
Transat said efforts to win over regulators in the EU, as well as Canada, could include “the offer of remedies, which should provide a greater chance of obtaining the required approvals” by February.
The EU’s antitrust arm previously warned that the deal could hamper competition by combining the two biggest airlines linking Europe and Canada. The statement of objections, not previously reported by the EU or the companies, is a typical move in complex deal reviews. Such filings raise the risks of a veto if antitrust concerns aren’t solved, often with an offer to divest operations.
Transat said on Tuesday that its expectations remain the same as in last week’s letter. It declined to comment on possible concessions “which are the purchaser’s responsibility.” Air Canada and the European Commission declined to comment.
Air Canada agreed to buy Transat in August 2019 before the coronavirus pandemic shut down most air travel. The company cut its offer for Transat to almost a quarter last month to reflect the decline in aviation assets.
Transat has agreed to the revised deal with Air Canada due to the need to secure additional financing and the low likelihood of securing regulatory approvals by an earlier Dec. 27 deadline, it said in the letter.
The EU currently has a Jan. 8 deadline to rule on the deal.
©2020 Bloomberg L.P.