Air Canada has entered into a 30-day exclusive negotiation period to purchase Transat, a Montreal-based tourism company.
Air Canada's bid for the company C$520 million including debt and net of cash is subject to approve - in what's seen as a move to strengthen the airline's leisure brand.
The airline is subject to a maximum reverse break up fee of C$40 million in the event the agreement is terminated due to lack of regulatory or government approval.
Transat operates a fleet of 33 aircraft. Most of the aircraft are old, but they are similar to aircraft AC already flies. As a result, Cowen has reported that it believes this is a good fit.