TORONTO — Remember back in 1999 when Onex Corporation wanted to merge Air Canada and Canadian Airlines in a $1.8 billion deal, only to have Air Canada emerge victorious with its $92 million acquisition of the struggling carrier? Well, Onex has made aviation headlines again with its proposed acquisition of WestJet in an all-cash deal worth $5 billion.

Assuming the deal goes through, WestJet will operate as a privately-held company from late 2019 or early 2020 onwards.

Under the terms of the agreement, Onex and its affiliated funds will acquire all outstanding shares of WestJet for $31 per share. The transaction value is approximately $5 billion including assumed debt.

Toronto-based Onex is a private equity firm headed up by founder, chairman and CEO Gerry Schwartz.

WestJet says it was approached by Onex in March 2019, at which point the WestJet board of directors formed a special committee of independent directors to provide the Board with its advice and recommendations with respect to the proposal from Onex and the transaction, and to supervise the negotiation of the terms and conditions of the transaction.

After an extensive review of the proposed transaction, says WestJet, the special committee provided its unanimous recommendation of the transaction to the WestJet board of directors.

The WestJet board of directors, having received and considered the recommendation of the special committee, determined that the transaction is in the best interests of WestJet and unanimously recommends that WestJet shareholders vote in favour of the transaction at the special meeting of shareholders to be held to approve the transaction.

There’s been no shortage of interesting developments in Canada’s airline sector, as the news comes less than two weeks after Transat’s announcement that that it too is in acquisition talks. Transat’s talks are very early stages but speculation is running rampant about who the buyer, if any, will be.

WestJet’s WestJet’s Founder and Chairman, Clive Beddoe, said in a statement released this morning: “Since our first flight in 1996, WestJet has been singularly focused on providing better options for the Canadian travelling public and this transaction retains that commitment. I am particularly pleased that WestJet will remain headquartered in Calgary and will continue to build on the success that our 14,000 WestJetters have created. Onex’s aerospace experience, history of positive employee relations and long-term orientation makes it an ideal partner for WestJetters, and I am excited about our future.”

Ed Sims, WestJet’s President and Chief Executive Officer, added: “We are delighted to continue the journey of building an airline based on a growing network, providing competitive airfares and more choice to, from and within Canada, for communities large and small. Integral to this relationship is a commitment to our employees, and our unique ownership-driven culture.”

WestJet beat expectations with its latest quarter results, announced last week. While the airline faces challenges from the grounding of its Boeing 737 Max aircraft and slow demand for newcomer Swoop, WestJet’s Q1 revenue was up 5.5% year over year to $1.26 billion. The airline’s first-quarter profit was up more than 30% year over year.

The transaction is to be completed by way of an arrangement under the Business Corporations Act (Alberta). Completion of the transaction is subject to a number of conditions, including court and shareholder approval and receipt of certain regulatory approvals, including approval under the Canada Transportation Act.

The approval under the Canada Transportation Act involves a determination by the Minister of Transport which entails an assessment of the public interest as it relates to national transportation.

“WestJet is one of Canada’s strongest brands and we have tremendous respect for the business that Clive Beddoe and all WestJetters have built over the years. WestJet is renowned internationally for its unparalleled guest experience and employee culture,” says Tawfiq Popatia, a Managing Director at Onex. “We’re thrilled to be partnering with WestJetters and continuing this remarkable Canadian success story.”