STAR Alliance partners Lufthansa and United Airlines have put together a £298m rescue package to help Air Canada fight a hostile takeover bid by Onex Corporation.
Both are keen to fend off Canadian industrial firm Onex, which has bid £735m to acquire both Air Canada and Canadian Airlines.
Onex Corporation is backed financially by American Airlines’ parent company AMR, and Canadian Airlines is a member of the British Airways and American-led rival alliance Oneworld.
Onex plans to merge Air Canada with Canadian Airlines into a single company, New Air Canada, and then become part of Oneworld.
Using the £298m pledged by United and Lufthansa, and £82m from the Canadian Imperial Bank of Commerce, Air Canada has offered shareholders £4.90 per share to buy back up to 35% of the company in order to beat off the Onex offer.
Air Canada has also bid £37.5m to acquire Canadian Airlines.
Meanwhile, the European Commission has launched an investigation into Onex’s proposed acquisitions.
The planned merger of the two airlines into a single company would create a monopoly on routes between London and Canada.