Mergers and acquisitions: Group wants aeroplane business

Two Canadian banks along with the nation's airline made a hostile bid recently for the Aeroplan rewards program of Aimia Inc. The bid, worth $2.25 billion, and which involves Air Canada, rocked the world of mergers and acquisitions in Canada. The bid was a shocker in the business world since about a year ago Air Canada said it would be cutting its ties with Aimia to start its own reward program.

A statement from Aimia suggests Air Canada approached the company in good faith and is seeking legal and financial advice as to whether the deal on the table will positively serve the company and its shareholders. Banks in on the proposed deal include the Toronto-Dominion Bank and the Canadian Imperial Bank of Commerce. Both these institutions offer Aeroplan loyalty program credit cards through Visa Canada.  The bid is comprised of $250 million in cash plus the assumption of $2 billion in Aeroplan points liability.

Everyone involved would benefit from the acquisition, according to financial analysts. That also includes Aeroplan clients who will be able to reap the benefits not having to go through getting new cards and potential re-evaluation of points earned. It is estimated that the deal for the two banks translates into more than $400 million in profit.

Some mergers and acquisitions in Canada come at the right time for the good of all concerned moving forward. Those in the business world who are thinking of learning more about this end of business may wish to get legal advice prior to making any decisions. A lawyer may be able to offer wise advice to help his or her clients make financially sound and beneficial business decisions.

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