Air Canada’s bid for Transat faces extended probe from EU

Bloomberg

Air Canada’s bid for tour operator Transat AT Inc faces an extended probe from European Union regulators who said the deal may hamper competition by combining the two biggest airlines linking Europe and Canada.
The European Commission set a September 30 deadline to rule on the deal, citing concerns that the “transaction could significantly reduce competition on 33” routes, according to an emailed statement.
One potential rival to the combined company, WestJet Airlines Ltd, is unlikely to be able to compete strongly on the routes that regulators see as problematic, the EU said.
Montreal-based Transat agreed in August to be acquired for C$18 a share in cash. Shares have since slumped well below that level, suggesting investors are questioning whether the $515 million deal will happen in light of the coronavirus crisis, which has hammered the prospects for travel companies.
Margrethe Vestager, the EU’s antitrust chief, said the pandemic shouldn’t prevent careful scrutiny of deals. “This is a challenging time, especially in markets severely impacted by the coronavirus outbreak, but a return to normal and healthy market conditions must be based on markets that remain competitive,” she said.