Onex has completed its transaction of acquiring WestJet (WS, Calgary) and its ULCC subsidiary Swoop (Hamilton, ON), valued at around CAD5 billion Canadian dollars (USD3.8 billion) including assumed debt, the investment management group confirmed in a statement dated December 11.

The closing of the deal came after Onex received final regulatory approval from the Canadian Transportation Agency (CAT) on December 10 that the two carriers would continue to meet Canadian ownership and control requirements as part of the group.

However, this was on the condition that Onex amends its bylaws to ensure that any matters voted on by the board of directors have a majority of Canadian directors being present, the agency cautioned.

WestJet shareholders approved the acquisition in July, with 92.5% voting in favour. Onex will acquire 100% of the company through its subsidiary Kestrel Holdings Inc., which will own and control WestJet via its unit Kestrel Topco Inc.

Onex asked the agency on May 31 to make an advance determination as to whether WestJet and Swoop would continue to meet Canadian ownership and control requirements within the group. Federal law limits foreign ownership of carriers to 49%, with a maximum of 25% for a single non-Canadian investor. As a private equity firm, Onex manages funds from foreign investors.

In September, Air Canada (AC, Montréal Trudeau) challenged the deal, arguing to the CTA that it breached rules limiting foreign ownership of airlines. But the agency noted in its decision that Gerry Schwartz, Onex's chairman and chief executive and a Canadian citizen, holds at least 60% of the voting interest in the company and will have the means to exercise control over Onex.

WestJet has long targeted Air Canada's superiority in the Canadian market, recently launching a challenge to the flag carrier's dominance on transatlantic routes. Meanwhile, Air Canada's own bid for Air Transat (TS, Montréal Trudeau) is continuing its journey through the approvals system.

Shareholders in WestJet are entitled to receive CAD31.00 (USD23.55) in cash for each share held, Onex said. WestJet's common shares will be delisted from the Toronto Stock Exchange within a few trading days.