Air Canada Airbus A321XLR. Photo: Air Canada Air Canada has completed its $800 million share buyback, purchasing 27.6 million of its own shares at $29 each for cancellation.
The airline said the shares purchased represent approximately 9.8% of its outstanding shares as of September 24, before the offer was completed. Following the transaction, about 252.7 million Air Canada shares will remain outstanding.
The purchase was carried out through a substantial issuer bid, which allows a company to buy back its own shares from investors and cancel them.
Air Canada said the transaction brings its share count below pre-pandemic levels and forms part of its capital allocation strategy. The airline said the buyback allows it to return capital to shareholders while continuing to invest in its New Frontiers strategy.
The offer was significantly oversubscribed. Air Canada received valid tenders for about 66.8 million shares at or below the $29 purchase price, meaning the airline could purchase only about 41% of the successfully tendered shares, excluding eligible odd-lot tenders not subject to proration.
Air Canada has paid approximately $800 million to TSX Trust Company, which is acting as the offer's depositary. Settlement to shareholders is expected to take place on or before October 2, 2026.
Shares that were not accepted for purchase, including those affected by the proration process or auction tenders above $29, will be returned to shareholders as soon as practicable.
The airline said the buyback was funded partly with proceeds from the minority equity investment in Aeroplan made by funds managed by Blackstone and La Caisse, along with other Canadian institutional investors.
Air Canada said the transaction allows it to continue investing in its business while maintaining what it described as one of the stronger balance sheets among its North American airline peers.
Air Canada also provided tax information related to the transaction.
The company estimates that the paid-up capital per share for purposes of Canada's Income Tax Act is approximately $10.60. As a result, shareholders who sold shares to Air Canada under the offer will generally be deemed to have received a dividend of $18.40 per share, representing the difference between the $29 purchase price and the estimated paid-up capital.
For Canadian resident shareholders, Air Canada said the deemed dividend is designated as an eligible dividend for federal income tax purposes and under corresponding provincial and territorial tax legislation.
The airline advised shareholders to consult their own tax advisers regarding the specific tax consequences of selling shares under the offer.