BMO Financial Group announced a deal Friday to acquire the Air Miles loyalty rewards program from LoyaltyOne Co.
Financial terms of the agreement were not immediately available.
Air Miles president Shawn Stewart called the deal a "significant step forward in solidifying the future of the Air Miles program."
The deal has "no impact on Air Miles collectors' reward miles balances or on collectors' ability to collect and redeem Air Miles reward miles," Stewart said in a statement.
Air Miles is one of the largest loyalty programs in ÎÚÑ»´«Ã½, with nearly 10 million active collector accounts representing about two-thirds of Canadian households.
Collectors earn Air Miles at retail stores and service locations as well as through some credit and debit cards, which can be redeemed for "aspirational rewards" like merchandise, travel, events, and attractions.
Loyalty Ventures Inc., the parent company of LoyaltyOne, filed for Chapter 11 bankruptcy in the U.S. on Friday.
The BMO deal for Air Miles has been proposed as part of LoyaltyOne's proceeding under the Companies' Creditors Arrangement Act in ÎÚÑ»´«Ã½.
The process will include a sale and investment solicitation process to seek any other interest in the Air Miles business.
The sale transaction is contingent on LoyaltyOne not receiving a more favorable offer and will require court approval.
BMO said the purchase would accelerate the future growth of Air Miles.
"If our acquisition of the Air Miles business is successful, we will bring the ownership of Air Miles home to ÎÚÑ»´«Ã½ and strengthen its offering for Canadian consumers and businesses together with leading Canadian, global and online program partners and merchants," Ernie Johannson, BMO's group head, North American personal and business banking, said in a statement.
The bank has been an Air Miles partner since 1992.
Rewards programs have proliferated in recent years as companies seek to learn more about customers and their shopping habits.
The data collected through these programs has increasingly been used to target customers with tailored-made marketing offers and promotions in a bid to increase sales and loyalty.
The mounting value of loyalty programs has prompted some retailers to adopt and expand their own programs.
Last June, grocery giant Empire Co. Ltd. said it would scrap the Air Miles program after becoming a co-owner of the Scene+ program operated by Cineplex Inc. and Scotiabank.
The parent company of chains like Sobeys, Safeway and FreshCo began to transition to Scene+ last August.
A notice on the Air Miles website said as of this month, Sobeys and all its affiliated banners will no longer be part of program once Thrifty Foods and IGA complete the company's exit.
This report by The Canadian Press was first published March 10, 2023.
Companies in this story: (TSX:BMO)
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