Onex Corp. is buying WestJet Airlines Ltd. for $ 5 billion, including the debt, in a friendly agreement announced Monday morning.
In a joint statement, the companies said that Onex will pay $ 31 per share for Calgary-based WestJet, a 67 percent premium over Friday's closing price.
Onex, based in Toronto, will transform the airline into a private company and retain its headquarters in Calgary, according to the press release.
WestJet and Onex said the cash deal, worth $ 3.5 billion excluding debt, will close this year or 2020.
This is not the first attempt by Gerry Schwartz of the founder of Onex to buy a Canadian airline. In 1999, Onex offered $ 1.8 billion for Canadian Airlines, an offer that was withdrawn after being excluded from the line by a Quebec court.
Last year the Canadian government approved legislation that increased the permitted foreign ownership of an airline to 49% from 25%. The change, aimed at attracting foreign investments, limits the voting rights of a single non-Canadian to 25%.
Founded in 1996, WestJet employs 14,000 people and has a fleet of about 180 aircraft flying to more than 1000 destinations.
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"Onex" aerospace experience, history of positive relationships with employees and long-term orientation makes it an ideal partner for WestJetters, and I am excited about our future, "said Clive Beddoe, founder and president of WestJet, in a statement.
The agreement was announced before the opening of the markets on Monday. WestJet shares are closed Friday at $ 18.52 in Toronto.
WestJet is Canada's second airline, competing with Air Canada.
WestJet's share price has fallen by 17% over the last 12 months due to the increase in fuel costs and revenues.
The airline formed a special committee of independent directors to review the Onex acquisition offer made in March. The committee recommends that shareholders vote in favor of the agreement, which is subject to regulatory approval, at an upcoming meeting.
Last week WestJet recorded a 33% increase in first-quarter earnings of $ 45 million, although its 13 Boeing 737 Max planes are based on concerns about the safety of new jets.
Related: the art of Onex's business: for Gerry Schwartz, the bland is good for business. But is it enough to face new challenges?