Air Canada (TSX: AC) and Aeroplan are reuniting after the two companies reached a deal for the airline to purchase the loyalty program for $450 million.
Air Canada will partner with financial services companies Toronto-Dominion Bank (TSX:TD), Canadian Imperial Bank of Commerce (TSX: CM) and Visa Canada to buy Aeroplan from its parent company Aimia Inc. (TSX: AIM), the airline said in a news release.
The two sides have been negotiating for weeks, since Air Canada went public with a hostile takeover offer for Aeroplan at the end of July. That plan valued the program at $250 million. Tuesday's deal sees that cash payout almost double.
Air Canada invented Aeroplan more than 30 years ago as its in-house loyalty rewards program. But more than a decade ago, Air Canada sold off Aeroplan as an independent company. Now the airline wants to buy back the program, so it can absorb all of its members into a new, as-yet-unnamed loyalty rewards program.
Shareholders of Aimia still have to vote on and approve the deal, but Aimia's largest shareholder, Mittleman Brothers, LLC, which owns 17.6% of the company, has already come out in favour of it.
