A pair of Canadian aviation and travel brands will soon be one.

Air Canada has entered an exclusive agreement with Transat A.T. Inc (Air Transat) to pursue the combination of the two companies.

Photo Credit: Air Transat

The proposed transaction is valued at around $520 million, or $13 per share of Air Transat, and will combine the two Quebec-based companies into one.

The acquisition presents a unique opportunity to compete with the very best in the world when it comes to leisure travel,” said Calin Rovinescu, president and chief executive of Air Canada.

“It will also allow us to further grow our hub at Montréal-Trudeau Airport.”

Photo Credit: Air Canada

Once complete, the acquisition will create a Montreal-based global travel services company in leisure, tourism and travel distribution.

The transaction remains subject to the finalization of definitive agreements, confirmatory due diligence and other approvals and closing conditions.

Air Canada has retained Morgan Stanley as its financial advisor for the acquisition and won’t make any more announcements until the definitive agreements are signed.