Air Canada and Transat AT Inc said on Friday they have mutually agreed to terminate the proposed acquisition of Transat by Air Canada, after being advised by the European Commission that it would not approve the deal.

Air Canada said that following recent discussions with the European Commission (EC), it has become evident the EC will not approve the acquisition based on the offered remedy package.

Air Canada in February refused to extend the deadline for its C$188.7 million ($150.19 million) deal for Transat, after European regulators did not give the go-ahead for the buyout.

The two companies had agreed in June 2019 on the acquisition, the terms of which were subsequently amended in August 2019 and then revised in October 2020 as a result of the severe economic impact of the COVID-19 pandemic.