The company's 25% sale aims to recover its full equity investment from 2019
WestJet Airlines Ltd. is undergoing a shift in its ownership structure following the sale of a 25% stake to a group of international airlines that includes Delta Air Lines and Korean Air.
The Financial Post reported that the $550 million transaction introduces new strategic airline shareholders while allowing Onex Corp. to retain a 75% economic interest in the Calgary-based carrier.
The sale enables Onex to recover the balance of its equity investment made in 2019 when it took WestJet private.
Onex CEO Bobby Le Blanc said that the deal closed at more than a 25% premium to the firm's current net asset value in the airline. Onex had originally agreed to purchase WestJet for $31 per share, totaling $3.5 billion in equity and $5 billion including assumed debt.
“This is a significant achievement that speaks to our team’s ability to deliver positive realizations for high quality assets in all market conditions,” said Le Blanc.
WestJet’s acquisition came as the airline was managing operating pressures tied to labor disputes, fuel costs, and intensified competition. The deal closed in December 2019, just months before the global pandemic forced the industry into a prolonged downturn. Despite these conditions, the firm has now secured a partial return on its investment while diversifying the airline’s ownership base.
According to CIBC Capital Markets analyst Nik Priebe, the equity valuation of the current transaction implies a 2.1 times multiple on Onex’s original investment. In a client note referenced by the Financial Post, Priebe said that the return could be even higher when factoring in previous capital distributions made by WestJet to Onex.
The sale also touches on Canada's regulatory framework for foreign airline ownership. With the transaction, Onex has reached the maximum threshold for foreign strategic investors allowed under Canadian law.
Tawfiq Popatia, co-head of Onex Partners, acknowledged that any future capital moves may involve public markets.
“Given its size, I think it’s natural to think about this as ultimately, one day, being reintroduced to the public markets,” he said.
As Financial Post has previously reported, Onex’s involvement in the airline industry dates back decades. In 1999, co-founder Gerry Schwartz led a bid to acquire and merge Air Canada with Canadian Airlines—a plan that was ultimately blocked in court.
Today, Air Canada shares trade at 58% below their value at the time Onex made its WestJet bid, according to Priebe, contrasting with Onex’s full recovery of its equity in WestJet.
