European regulators have refused to give the go-ahead for Air Canada's planned buyout of Canadian tour operator Transat A.T. Inc, despite Canada's approval.
Air Canada refused to extend the deadline for its C$188.7 million ($148.73 million) deal beyond February 15, after European regulators failed to give the go-ahead for the buyout.
Canada approved Air Canada's purchase of troubled rival Transat A.T. Inc, subject to a number of conditions, last week.
In a statement, Canadian transport minister Omar Alghabra said that the COVID-19 pandemic was a key factor in the decision, given that Air Transat has already made clear that a slump in travel is hitting its finances.
Air Canada's commitments included encouraging and helping other airlines to take up former Transat routes to Europe, preserving the Transat head office in the province of Quebec and facilitating aircraft maintenance in Canada, Alghabra added.
In December, Transat shareholders approved a sharply discounted C$188.7 million ($149 million) buyout offer from Air Canada, after COVID-19 hit travel demand.
Air Canada initially reached a deal before the pandemic to buy the Montreal-based operator of Air Transat, in a move to bolster its then-thriving leisure business.
Air Canada Refuses To Extend Deal Deadline
The deal was pending approval from the European Union, which halted its investigation into the deal on December 22. However, European regulators have now refused to give the deal the green light, and Transat has said that Air Canada has refused to extend the deadline for the deal beyond February 15.