WestJet CEO says $5B deal will give company long-term stability
Onex Corporation has made a $5 billion offer to buy WestJet.
WestJet’s CEO says a $5 billion offer to buy the Calgary-based airline will provide stability for the company and allow them to focus on long-term goals.
The all-cash offer from Onex Corporation, a Toronto based private equity firm, was announced Monday. WestJet has accepted but the offer still has to go through a number of regulatory hurdles and must be approved by shareholders.
Terms of the deal will see Onex Corporation and its affiliated funds acquire all outstanding shares of WestJet for $31 per share, after which WestJet will operate as a privately-held company.
Speaking to reporters on Tuesday, WestJet CEO Ed Sims says the deal with give them the tools to implement long-term strategies.
“One of the biggest challenges in the aviation industry is volatility and people worried about sustainability of business models,” he said.
“What Onex’s investment gives us now is that sustainability. It gives us the ability to deliver on our long-term strategy, to deliver a complex, interdependent series of initiatives with confidence that we have the backing of a Canadian-based entity.”
Sims said WestJet has been focused on incorporating the 787 Dreamliner into its fleet, as well as establishing its ultra-low cost carrier, Swoop, and joint ventures with Delta and KLM airlines.
“We have many initiatives on our plate at the moment and our focus with Onex is to make sure we get full economic returns on those initiatives,” he said.
The company’s headquarters will remain in Calgary if the sale is approved.
“We like to think we’re not just made in Calgary, we’re made of Calgary,” said Sims.
“We have 3,500 staff here of the 14,000 staff nationwide. This is our roots, this is our heritage. We believe we actually uphold Calgary and Alberta’s values as we fly, of hospitality, of outstanding service, of being representative of the melting pot that is the Canadian diaspora.
“And for us, this is our home, and we want to stay true to our roots and true to our DNA.”
A special meeting is planned for July to allow shareholders to vote on the proposed deal.
If approved, the deal is expected to be completed by 2020.