Delta and Korean Air are to acquire independent equity stakes totalling 25% in WestJet for a total of $550 million. The bold move will see Delta invest $330 million for a 15% stake in the airline, and Korean Air pay $220 million for a 10% share in the Alberta, Calgary based carrier.
Investments to Build on Existing Relationship
The shares, purchased from Onex Partners and its affiliates (The Onex Group), will see Delta and Korean Air build on their existing relationship with WestJet, providing more benefits to customers’ globally.
Delta and Korean have been codeshare partners with WestJet since February 2011 and June 2012 respectively, and it is expected that the investment will enhance the relationships even further.
Speaking on the investment, Delta CEO Ed Bastian said:
”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 travellers in the United States and Canada. Together, Delta and our airline partners are connecting the world and transforming the future of travel.”
Walter Cho, Chairman and CEO of Korean Air and Hanjin Group echoed these sentiments, saying:
“We are pleased to invest in WestJet as part of our continued commitment to enhancing transpacific connectivity. This strategic partnership will enhance our global network and create long-term value for customers through greater choice and convenience.”
Upon closing, it is expected that Delta will sell and transfer a 2.3% stake in WestJet to Joint Venture Partner Air France-KLM for $50 million, subject to several approvals.
More About WestJet
WestJet Airlines was founded in 1994 and is now Canada’s second largest airline. Beginning operations in 1996 with 220 employees, three aircraft, and five destinations, it positioned itself as a low-cost alternative to the country’s major airlines. It currently flies to over 100 destinations in North and Central America, the Caribbean and Europe, with more provided through the airline’s many partnerships.
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