CP Air and Nordair agreed in principle to merge.

Under the proposal, which was approved by directors of both firms, outstanding shares of Nordair common stock will be exchanged for CP Air preferred shares with a stated value of $43 million, or $17.57 per share. The transaction is subject to approval by shareholders of both firms and by the Canadian Transport Commission. CP Air, a subsidiary of Canadian Pacific Ltd., said it hopes to complete the merger by the end of the year.