EU antitrust regulators are delaying their decision to approve the proposed purchase of Transat A.T. by Air Canada until early next year, it was announced on Friday (Nov 6).
The deadline to approve the transaction was originally set for Dec. 11, 2020. Now, the European Commission (EC) is saying that it needs until Jan. 8, 2021, to make a final call.
The deadline for the multimillion-dollar deal, which was originally set for Dec. 27, has also been postponed to Feb. 15, 2021.
The news comes after Air Canada lowered its price to buy Transat to reflect today's current economic conditions, which have changed due to the coronavirus crisis since the deal was first approved by Transat shareholders in August 2019.
The value of the agreement has also changed significantly as air travel continues to face unprecedented challenges due the downturn in demand.
Air Canada will now acquire all shares of the Quebec-based tour operator for $5.00 per share, compared with $18 previously.
The value of the deal is also now approximately $190 million (CAD), down from C$720 million previously.
The EC, which oversees competition policy in the 27-member European Union, is currently studying the deal to determine if it will hinder competition, increase prices and lead to fewer choices for consumers.
In March, the Competition Bureau of Canada was unfavourable to the transaction, but it should be noted that their analysis was done before the COVID-19 pandemic outbreak.
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