WestJet Boeing Next Generation 737. Credit: WestJet.

Canada’s Transport Minister Marc Garneau has approved the proposed C$5bn ($3.71bn) acquisition of WestJet Airlines by private equity company Onex.

In May, Onex and its affiliated funds agreed to acquire all outstanding shares of WestJet for C$31 ($23.04) a share, following which WestJet will operate as a privately held company.

The offer was a reduction from the preliminary price of C$35.75 ($27.10) a share submitted by Onex in March over uncertainties associated with the grounding of Boeing 737 Max jets.

Garneau determined that the agreement doesn’t raise public-interest issues for national transportation.

The decision clears the first of various regulatory hurdles. The deal is still subject to WestJet shareholders and the final approval by the Court of Queen’s Bench of Alberta.

WestJet president and CEO Ed Sims said: “We welcome the decision by the Minister of Transport, and we will continue to cooperate with the necessary authorities on the remaining regulatory approvals.”

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Anticipated to close in the latter part of 2019 or early 2020, the transaction will be completed via an arrangement under the Business Corporations Act (Alberta).

Onex Partners, Onex’ private equity platform focused on larger investment opportunities, will lead the equity financing. CIBC Capital Markets is acting as financial adviser to WestJet.

WestJet and its regional airline WestJet Encore offers scheduled services to destinations in North America, Central America, the Caribbean and Europe, as well as more than 175 destinations through its airline partnerships.

Earlier this month, WestJet said that it is developing Flight Light to connect families. It will allow kids to watch their parents’ flight in real-time and show them just how close they are to arriving home.

A prototype of the Flight Light has been created and beta testing is scheduled to start later this year.