Onex selling minority stakes in WestJet to Delta & Korean Air

Onex Corp. is selling its minority stakes in WestJet to Delta Air Lines and Korean Air for a total of US$550 million, it was announced Friday (May 9).

Under the deals, Delta will acquire a 15 per cent stake in the Calgary-based airline for US$330 million, while Korean Air will buy a 10 per cent stake for US$220 million.

Upon closing, Delta has the right and intent to sell and transfer a 2.3 per cent stake in WestJet to its Joint Venture partner Air France-KLM, also an existing WestJet partner, in exchange for US$50 million.

This separate transaction would remain subject to certain Air France-KLM approvals.

The Onex Group, which acquired WestJet in 2019, will continue to own and control WestJet.

Delta and Korean have each been codeshare partners with WestJet for years. The broader partnerships will support future benefits for travelers, including an elevated, more seamless travel experience for customers worldwide.

“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,” said Delta CEO Ed Bastian in a press release. “Together, Delta and our airline partners are connecting the world and transforming the future of travel.”

“We are pleased to invest in WestJet as part of our continued commitment to enhancing transpacific connectivity,” said 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.”

“Delta, Korean and Air France-KLM are among the world’s most prominent and best-managed airlines. Onex is delighted to welcome them as shareholders in WestJet,” stated Tawfiq Popatia, Co-Head of Onex Partners.

"These investments, and the enhanced partnerships they bring, are an endorsement of our people and WestJet’s differentiated performance through an extraordinary period for aviation in recent years," stated WestJet CEO Alexis von Hoensbroech.

Delta and WestJet have been partners since February 2011.  

In recent years, Delta has made equity investments with several international partners, including Air France-KLM, LATAM, Aeromexico, Virgin Atlantic, China Eastern and Korean Air’s parent company, Hanjin KAL.

Korean Air and WestJet have partnered since June 2012, expanding their transpacific connectivity.

Through their codeshare agreement, travellers on both sides of the Pacific can access flights between Seoul Incheon and Vancouver, Toronto, and Calgary, with onward connections to WestJet’s domestic Canadian and U.S. routes, as well as Korean Air’s extensive Asian network.

Barclays is acting as financial advisor to WestJet and Onex on the transaction. The agreement is subject to certain regulatory approvals.

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