BMO Financial Group signs deal to buy Air Miles loyalty rewards program

BMO Financial Group introduced a deal Friday to purchase the Air Miles loyalty rewards program in Canada after its U.S. father or mother firm filed for chapter.

Financial phrases of the financial institution’s settlement with LoyaltyOne Co. weren’t instantly out there.

Air Miles president Shawn Stewart stated the deal “brings stability to the Air Miles program.”

“It gives us the opportunity to grow the program for our collectors and partners, and confidence in the future of the program,” he stated in an interview.

“Our U.S. parent company had a ton of debt and that just constrained our ability to invest in value for the collector.”

The deal has no impression on reward miles balances or the power to redeem miles, Stewart added.

Air Miles is likely one of the oldest and largest loyalty applications in Canada, with almost 10 million lively customers.

Collectors earn Air Miles by taking part shops, providers and fee playing cards, which might be redeemed for “aspirational rewards” like merchandise, journey, occasions, and points of interest.

Yet Air Miles has misplaced a string of massive retailers in Canada in recent times.

Last summer time, Sobeys and Safeway proprietor Empire Co. Ltd. and workplace provide retailer Staples stated they’d be scrapping the Air Miles program, a 12 months after the Liquor Control Board of Ontario and Lowe’s Canada pulled out of this system.

The Air Miles father or mother firm inventory, which was traded on Nasdaq, fell after Sobeys pulled out of this system.

Loyalty Ventures Inc., the father or mother firm of LoyaltyOne, filed for Chapter 11 chapter within the U.S. on Friday. It additionally delisted its widespread inventory from the Nasdaq.

The BMO deal for Air Miles has been proposed as a part of LoyaltyOne’s continuing underneath the Companies’ Creditors Arrangement Act in Canada.

The course of will embrace a sale and funding solicitation course of to hunt every other curiosity within the Air Miles business.

The sale transaction is contingent on LoyaltyOne not receiving a extra beneficial supply and would require courtroom approval.

BMO stated the acquisition would speed up the longer term development of Air Miles.

“If our acquisition of the Air Miles business is successful, we will bring the ownership of Air Miles home to Canada and strengthen its offering for Canadian consumers and businesses together,” Ernie Johannson, BMO’s group head, North American private and business banking, stated in an announcement.

The financial institution has been an Air Miles accomplice because it was based in 1992.

Rewards applications have proliferated in recent times as firms search to study extra about prospects and their procuring habits.

The knowledge collected by these applications is used to focus on prospects with tailored advertising and marketing affords and promotions in a bid to extend gross sales and loyalty.

The mounting worth of loyalty applications has prompted some retailers to undertake and increase their very own applications.

Last June, Empire stated it could scrap the Air Miles program after it turned a co-owner of the Scene+ program operated by Cineplex Inc. and Scotiabank.

Stewart, who joined Air Miles final spring after eight years constructing and rising Canadian Tire Corp.’s Triangle Rewards loyalty program, stated it is an more and more aggressive market.

But Air Miles nonetheless has a aggressive edge, particularly for small- and medium-sized companies that may not have the dimensions to put money into their very own loyalty program, he stated.

“With Air Miles you get the benefit of access to 10 million collectors out of the gate,” Stewart stated. “We’re lending our scale and a very well-known recognized brand to businesses.”

Still, whereas Air Miles is obtainable by some small mother and pop retailers, it continues to boast numerous bigger retail companions, together with Metro grocery shops and its drugstore chain Jean Coutu, American Express Canada, Irving and Shell gasoline stations in addition to on-line companions like Amazon and eBay.

This report by The Canadian Press was first revealed March 10, 2023.