Final Price For AC’s Acquisition Of Aeroplan Is $516 Million

Bruce Parkinson, Open Jaw

The final price for Air Canada to purchase the Aeroplan loyalty program from Aimia Inc. is approximately $516 million. The original share purchase agreement was signed on 26NOV, 2018.

A final payment to Aimia by Air Canada of approximately $19 million will result in the transaction having a total purchase price of approximately $516 million. The post-closing adjustments were primarily related to favourable working capital relative to the target working capital set out in the share purchase agreement.

As previously disclosed, $100 million of the proceeds was agreed to be held in a restricted cash account established in conjunction with the sale of Aeroplan Inc. in respect of any re-assessment to be received from the Canada Revenue Agency related to an outstanding audit for the 2012 and 2013 taxation years for Aeroplan Inc. 

Aeroplan Inc. has now received notices of re-assessment from the Canada Revenue Agency relating to the audit. The amount to be paid per the final audit letter is approximately $35 million, of which an initial amount of $24 million has already been paid. 

The balance of approximately $65 million in the restricted cash account would be released to Aimia in accordance with the terms of the share purchase agreement between Aimia and Air Canada. 

Aimia says a notice of objection will be filed in the coming weeks to contest the re-assessments.

Bruce Parkinson

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.

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