Onex signs agreement to buy WestJet in deal valued at $5B, including debt

CALGARY – Onex Corp. has signed a friendly deal to buy WestJet Airlines Ltd. in a transaction is valued at $5 billion, including assumed debt.

Under the agreement announced Monday, Onex will pay $31 per share for WestJet, which will continue to operate as a privately held company.

Shares in the airline closed at $18.52 on Friday.

WestJet founder and chairman Clive Beddoe said Onex is an ideal partner for the airline.

“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,” Beddoe said in a statement.

The deal comes after Onex approached the airline in March.

“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.

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

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.

How will this affect customers?

With Onex buying Westjet, David Elmy with the Travel Group agency doesn’t expect you’ll notice much as a flyer.

“In the past, the more common takeover is one airline taking over another one and then I think there’s clearly a noticeable change from the consumer’s point of view,” he adds.

Meanwhile, McGill professor Karl Moore, who has worked as an airline consultant, believes a strengthened WestJet could increase competition.

“They have deep pockets behind them, they have an owner that’s going to be patient and bring real value and insights to them,” he says. “This should be good for the Canadian employer and consumers.”

-With files from Martin MacMahon