Delta Air Lines and Korean Air will acquire a combined 25% stake in Canadian carrier WestJet from private equity firm Onex, in a deal valued at $550 million.
Under the new agreements, both airlines will acquire independent equity stakes, Delta will investing $330 million and acquiring a 15% stake, and Korean investing $220 million in exchange for a 10% stake.
Upon closing the transaction, Delta can sell a 2.3% stake in WestJet to its joint venture partner, Air France-KLM for $50 million. The Franco-Dutch airline group is also an existing WestJet partner. This separate transaction would remain subject to certain Air France-KLM approvals.
“Investing in a world-class partner like WestJet aligns our interests and ensures that we remain focused on providing a world-class global network and customer experience for travellers in the United States and Canada,” said Delta CEO Ed Bastian. “Together, Delta and our airline partners are connecting the world and transforming the future of travel.”
WestJet, which has had various partnerships with Delta and Korean Air since 2011, will continue to be owned and controlled by Onex, Delta said.
Barclays is acting as financial advisor to WestJet and Onex on the transaction.