Air Canada (TSXV:AC) has just made the formal announcement this morning that its company has acquired Aeroplan from Aimia Inc (TSXV:AIM) for $450 million CAD.
Air Canada Acquires Aeroplan
Air Canada, TD, CIBC, Visa and Aimia Reach Agreement in Principle for Acquisition of Aeroplan Loyalty Business https://t.co/StI7FXxgI7
— Air Canada (@AirCanada) August 21, 2018
The Canadian airline is planning on forming a consortium with Toronto-Dominion (TD) Bank, Canadian Imperial Bank of Commerce, and Visa to buy Aeroplan from Aimia Inc. Towards the end of July, Air Canada went public with their take over offer for Aeroplan and the two sides have been going in circles for weeks.
“We are pleased to see that an agreement in principle has been reached as Aeroplan members can continue to earn and redeem with confidence. This transaction, if completed, should produce the best outcome for all stakeholders, including Aeroplan Members, as it would allow for a smooth transition to Air Canada’s new loyalty program launching in 2020, safeguarding their miles and providing convenience and value for millions of Canadians,” said Calin Rovinescu, President and CEO of Air Canada, on behalf of the consortium.
The plan originally valued the Aeroplan program at $250 million but today’s announcement has the price tag almost double. Air Canada will pay in cash for Aeroplan and will be on the hook for $1.9 billion worth of unused Aeroplan points.
30 years ago, Air Canada set up Aeroplan as its own in-house loyalty program. Almost a decade ago, it sold Aeroplan to Aimia as an independent company.
With this new deal, it is expected that around 1,000 Aeroplan employees will move over to Air Canada, which leaves Aimia’s staff to around 650. Both companies stocks are trading well today.
Stock Movement
According to Yahoo Finance, Air Canada’s stock is trading at $26.51 a share, up $1.79 (+7.24%). Amaia Inc’s stock is currently trading at $4.35 a share, up $0.51 (+13.28%).
Featured Image: twitter
