WestJet to be sold in $5B deal | CBC News

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WestJet to be sold in $5B deal | CBC News

WestJet says it has agreed to be acquired by Onex Corporation and will become a private company in a deal valued at $5 billion. 

Under the agreement announced Monday, Onex will pay $31 per share for WestJet.

Shares in the airline closed at $18.52 on Friday, but shot up to $30.03 on Monday morning as news of the Onex offer broke. 

Completion of the transaction is subject to a number of conditions, including court, regulatory and shareholder approvals.

Will be based in Calgary

A special meeting of shareholders is expected to take place in July to vote on the transaction. 

“I am particularly pleased that WestJet will remain headquartered in Calgary and will continue to build on the success that our 14,000 WestJetters have created,” WestJet founder and chair Clive Beddoe said in a news release.  

“Onex’ aerospace experience, history of positive employee relations and long-term orientation makes it an ideal partner for WestJetters, and I am excited about our future.”

The deal comes after Onex, a private equity firm, approached the airline in March.

Special meeting in July

“WestJet is one of Canada’s strongest brands and we have tremendous respect for the business that Clive Beddoe and all WestJetters have built over the years,” said Tawfiq Popatia, a managing director at Onex.

WestJet’s board of directors has unanimously recommended shareholders vote in favour of the deal at meeting expected to be held in July.

The deal is expected to close in the latter part of 2019 or early 2020.

WestJet started in Calgary in 1996 and has expanded from a low-cost domestic airline to an international carrier with flights to the U.S., Europe and the Caribbean. 

Changes and struggles

News of the deal comes after the airline struggled in 2018.

Soaring fuel costs, labour unrest, and steep competition at home and abroad caused the airline to incur its first loss in 13 years during the second quarter of last year. That was followed by a steep year-over-year drop in the third quarter, but the airline nonetheless bounced back into the black.

Revenues and efficiency were “nowhere near” the airline’s potential, chief executive Ed Sims said during a WestJet investor conference in December 2018.

Onex was founded in 1984. The company says it manages $31 billion in assets.

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