CBJ — It appears as if Air Canada still plans to acquire Transat AT, which includes the Air Transat airline company, but it will now be at a drastically reduced price.

The ongoing global pandemic has driven down the value of all airplane companies due to a lack of national travel and international travel that has essentially become nothing more than a trickle.

The two companies met recently and have agreed to revised terms that will now see Air Canada pay $5 per share for Transat AT. Originally, Air Canada was going to have to pony up $18 per share for the acquisition — but that was months ago, prior to the entire global economy being sent into a tailspin. Based on the $5 per share valuation it puts the price tag at just $190 million, down from $720 million.

“This is the worst crisis since the founding of Transat 33 years ago, and with a second wave of the pandemic underway, the timing of an eventual recovery remains uncertain,” Transat President and CEO Jean-Marc Eustache said in a statement released to the media. “More than ever, having a national airline with the scale to weather current industry turbulence, which is expected to continue for several years, is in the best interests of our shareholders, customers, employees and other stakeholders.”

Transat AT’s board of directors have already approved the sale, but it still must receive approval of two-thirds of all shareholders.

@CanBizJournal