By Adriano Marchese
A Canadian antitrust watchdog will investigate WestJet Group’s proposed acquisition of Sunwing Airlines Inc. and Sunwing Vacations Inc. to determine if there would be any negative effects on competition.
Earlier on Wednesday, WestJet Group of companies, owned by parent-company Onex Corp. (Canada), said it had reached an agreement to acquire Sunwing Vacations and Sunwing Airlines.
The Competition Bureau said that it will review the mergers to determine whether they are likely to result in a substantial lessening or prevention of competition.
“Under the Competition Act, the Competition Bureau has a mandate to review mergers to determine whether they are likely to result in a substantial lessening or prevention of competition,” the regulator said in a statement.
As part of its review, for which the Competition Bureau didn’t give a specific timeline, a wide range of industry participants will be consulted, including suppliers, competitors and industry associations and experts.
WestJet said that the combination with Sunwing will give Canadian travellers greater access to more competitive airfare and affordable vacation packages.
“This acquisition will improve the WestJet Group’s ability to offer more affordable fares by immediately expanding its low-cost footprint in Canada,” it said.
WestJet said that its proposed merger will drive growth and create new jobs, with absorbed Sunwing Airlines’ aircraft running year-round in Canada rather than only seasonally.
“The transaction will bring together two distinctly Canadian travel and tourism success stories to deliver new travel options and greater value for travellers in the rapidly expanding leisure and work-from-anywhere travel markets,” it said in a statement.
Following the close of the merger, a new tour operating business unit will be created under the WestJet Group that will include both Sunwing Vacations and WestJet Vacations Inc., its tour operator segment, and will be headed by Sunwing Chief Executive Stephen Hunter.
The combination, which will require regulatory approval, is anticipated to close later this year.
Write to Adriano Marchese at adriano.marchese@wsj.com