Air Canada's proposed takeover of Transat may not close until the second half of 2020, with Transport Canada given up to 2 May to complete a public interest assessment of the transaction.
"The Minister of Transport has determined that the transaction raises public interest issues related to national transportation. As such, a public interest assessment of the proposed transaction will be conducted with input from the Commissioner of Competition, who will assess impacts on competition," states the regulator.
Transat is the parent company of Montreal-based carrier Air Transat and operates a sizable vacation package business.
The assessment will include consultation with the aviation industry and other stakeholders, and consider the economic benefits and challenges associated with the takeover.
Those consultations will begin on 4 November. While the process has a statutory time limit of 150 days, transport minister Marc Garneau has granted an additional 100 days to complete it, citing the "size and scope of the proposed transaction."
Once the assessment is complete, it will be presented to the minister, who in-turn then presents it to cabinet for a final decision. There is no legislated time limit for cabinet to make its decision, Transport Canada adds.
Transat shareholders voted overwhelmingly in favour of Air Canada's C$720 million ($544 million) takeover bid for the company on 23 August.
Air Canada indicated subject to obtaining all required approvals, it had planned to close the deal in early 2020, but that now appears unlikely.