Air Canada has announced that with the financial support of its partners Toronto-Dominion Bank, Canadian Imperial Bank of Commerce, and Visa Canada, it has entered into a definitive share purchase agreement with Aimia for the acquisition of Aimia Canada Inc., owner and operator of the Aeroplan loyalty business.
Concurrently with the signing of the share purchase agreement, Air Canada, TD, CIBC and Visa signed various commercial agreements relating to the acquisition, including credit card loyalty program and network agreements for future participation in Air Canada's new loyalty program, all of which are conditional upon closing of the acquisition of Aimia Canada.
Air Canada says it remains in negotiations with American Express, which also issues Aeroplan co-branded products, to secure its continued participation in the Aeroplan program after 2020.
"We are extremely pleased to have concluded the agreement for the purchase of Aimia Canada and to have reached definitive agreements on our co-branded credit card programs with each of TD and CIBC. Subject to closing the purchase transaction, these agreements will produce the best outcome for our customers as well as those of our partners as they will facilitate a smooth transition to our new loyalty program launching in 2020, safeguarding all Aeroplan Miles and providing convenience and value for millions of Canadians,” said Calin Rovinescu, President and CEO of Air Canada.
“Our program is expected to be one of the best loyalty programs in the industry, which will be exciting for our customers and we are looking forward to communicating details later next year."
The acquisition of Aimia Canada remains subject to Aimia shareholder approval and certain other closing conditions, including receipt of applicable regulatory approvals. The closing of the acquisition is expected to occur in January 2019.
The aggregate purchase price consists of $450 million in cash subject to post-closing adjustments and includes the assumption of approximately $1.9 billion of Aeroplan Miles liability.
Air Canada will receive payments from TD and CIBC in the aggregate amount of $822 million. Visa will also be making a payment to Air Canada. In addition, TD and CIBC will make payments to Air Canada, at closing, in the aggregate amount of $400 million as prepayments to be applied towards future monthly payments in respect of Aeroplan miles.
Bruce Parkinson Editor-in-Chief
An observer and analyst of the Canadian and international travel industries for over 25 years, Bruce uses the pre-dawn hours to prepare a daily news and information package to keep industry members up to date.