The proposed takeover of Sunwing Airlines (WG, Toronto Pearson) by WestJet Group could hit a snag due to the indirect involvement of Russian steel magnate Alexei Mordashov, according to Canada's Globe and Mail newspaper.

Mordashov's company, Unifirm Limited, until recently, owned 34% of the global tourism group TUI Group, which owns 49% of Sunwing and will become a part-owner of WestJet if the deal gets the nod from Canada's Competitions Commissioner and Transport Canada. As with all airline takeovers in Canada, the regulators are currently scrutinising the deal before reporting to Transport Minister Omar Alghabra, who will make the final decision.

However, Unifirm on February 28 sold Mordashov's 4.13% stake in TUI Group to Severgroup LLC, decreasing Unifirm's share in TUI Group to 29.87%, the company announced in a statement on March 4. "Severgroup would therefore now hold 4.13% of TUI AG. The shares would be attributed to Mr. Mordashov," the company explained.

Mordashov's KN-Holding LLC and Rayglow Limited also sold their shares in Unifirm to Ondero Limited. The Guardian newspaper reported, the Russian magnate resigned with immediate effect from the TUI Group supervisory board last week after he was hit with European Union sanctions over Moscow's invasion of Ukraine. TUI Group clarified that the supervisory board is not involved in daily operations or executive decisions.

Neither WestJet, TUI Group, nor the regulators were immediately available for comment.

Transport Canada spokeswoman Frédérica Dupuis told The Globe and Mail the Minister would "consider all relevant factors in reviewing any proposed merger. However, to respect the integrity of the process, it would be inappropriate to provide details on specific cases".

When announcing the deal on March 2, WestJet and Sunwing said they hoped to finalise it by late 2022. Under its terms, Sunwing's current shareholders would become equity holders in the WestJet Group. Sunwing is 51% controlled by the Hunter family and 49% by TUI Group.

TUI Group meanwhile announced it had terminated the brand use agreement it had with TUI Russia, which it said was not part of the TUI Group of companies.