In Brief: LG to exit smartphone market

Plus, Air Canada calls off Transat acquisition after hitting a regulatory wall in Europe.
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LG to shutter smartphone business

Technology company LG intends to get out of selling smartphones by the end of July.

LG had a 10% share of the smartphone market in North America, behind Apple and Samsung and ahead of Google, Motorola and Huawei. But, globally, the division has logged US$4.5 billion in losses over the last six years, with a slight uptick in sales in the most recent quarter but not enough to return the division to profitability.

Smartphones is also the smallest of LG’s five divisions in terms of revenue. Moving forward, the company said in a statement that it will continue to use its capabilities and IP in mobile to strengthen its capabilities in these other areas – such as smart vehicle platforms, robotics and other home electronics – as well as infrastructure in 5G and 6G.

Air Canada terminates deal to acquire Transat

Nearly two years after it was first revealed, Air Canada decided to end its plans to acquire leisure airline Transat AT after being unable to get past regulators in Europe.

First announced in 2019, the $190 million deal was intended to further grow the country’s largest airline with the addition of Transat’s established foothold in the leisure and vacation travel market. But Air Canada received word last week that the deal – which had been amended to reflect the realities of the COVID-19 pandemic and to appease regulators – was unlikely to be approved by the European Commission without what the airline described in a statement as “onerous remedies.”

Air Canada will pay Transat a $12.5 million fee for the termination of the deal. Transat is also dealing with a historic downturn in leisure travel due to the pandemic, but in a statement, Transat CEO Jean-Marc Eustache said he is confident about the company’s future, and being free of the deal gives it the freedom to pursue other options, such as obtaining long-term financing.