Delta Airlines announced it and Korean Air will strengthen their partnership with WestJet by purchasing equity stakes in the Canadian airline.
Under the agreement, Delta and Korean Air will acquire independent equity stakes totaling 25 percent in WestJet for $550 million from Onex Partners and its affiliated funds and co-investors, also known as the Onex Group. Delta will invest $330 million and acquire a 15 percent stake, while Korean will invest $220 million for a 10 percent stake. The agreement will align the airlines’ interests, the companies said, while expanding customer benefits and strengthening the connectivity between Canada and North America, Europe and Asia.
“Investing in a world-class partner like WestJet aligns our interests and ensures that we remain focused on providing a world-class global network and customer experience for travelers in the United States and Canada,” Delta CEO Ed Bastian said. “Together, Delta and our airline partners are connecting the world and transforming the future of travel.”
Once the deal closes, officials said, Delta has the right and intent to sell and transfer a 2.3 percent stake in WestJet to its Joint Venture Partner Air France-KLM in exchange for $50 million. This transaction is subject to Air France-KLM approvals, however. The Onex Group will continue to own and control WestJet.
“We are pleased to invest in WestJet as part of our continued commitment to enhancing transpacific connectivity,” Walter Cho, Chairman and CEO of Korean Air and Hanjin Group. “This strategic partnership will enhance our global network and create long-term value for customers through greater choice and convenience.”