Westjet announced today that it has agreed to buy Canadian low-cost rival Sunwing Airline and Sunwing Vacations. Though the exact terms weren't disclosed, Westjet and Sunwing announced that Sunwing’s current shareholders will become equity holders of WestJet. Bloomberg reported earlier Wednesday that Onex Corp.’s WestJet (Onex Corp is the parent company of Westjet) was nearing a deal for Sunwing. The deal will position the carriers “to accelerate growth in value-oriented travel, already the fastest growing segment of the airline market,” WestJet Chief Executive Officer Alexis von Hoensbroech said in the statement. Both Westjet and Sunwing operate flights to Jamaica. Westjet operates flights to both MBJ Airport in Montego Bay and Norman Manley International in Kingston, Jamaica while Sunwings operates flights to MBJ Airport.
The combined carriers will have a fleet of around 190 aircraft, comprising mostly of narrow-body Boeing Co. 737 jets. A new tour operating business unit will be created under WestJet Group to include both Sunwing Vacations and WestJet Vacations.
It is also reported that Canadian regulators will be investigating the planned acquisition to determine whether they are likely to result in a substantial lessening or prevention of competition. "Under the Competition Act, the Competition Bureau has the mandate to review mergers to determine whether they are likely to result in a substantial lessening or prevention of competition," the regulator said in a statement.
As part of its review, for which the Competition Bureau didn't give a specific timeline, a wide range of industry participants will be consulted, including suppliers, competitors, industry associations, and experts.
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