Aimia, TD, CIBC reach compromise on Aeroplan cardholders

TD Bank Group, Canadian Imperial Bank of Commerce (CIBC) and Aimia Inc. have settled on a compromise covering the Aeroplan loyalty credit cards that handle billions of dollars worth of transactions annually. As a result of the agreement, each bank will have rights to half the portfolio of accounts that offer their customers loyalty points […]

TD Bank Group, Canadian Imperial Bank of Commerce (CIBC) and Aimia Inc. have settled on a compromise covering the Aeroplan loyalty credit cards that handle billions of dollars worth of transactions annually.

As a result of the agreement, each bank will have rights to half the portfolio of accounts that offer their customers loyalty points that can be exchanged for airline tickets and other goods through Aimia’s flagship Aeroplan program.

“I think you’ll agree that this is really a very strong outcome for all parties concerned,” Rupert Duchesne, group chief executive for Aimia, told analysts after the announcement.

“Being with two leading credit card providers, and what that will do to drive immediate growth for us, is very encouraging. It will also take out any uncertainty for credit card holders.”

He said every Aeroplan credit card holder will carry on earning miles seamlessly for the rest of this year and through next year.

“And that is a great asset of this deal,” Duchesne said.

TD said it expects to acquire approximately 550,000 cardholder accounts from CIBC, representing approximately $3 billion in card balances and $20 billion in annual retail spending.

CIBC will retain the half of the portfolio that includes Aerogold customers with broader relationships with the bank, which has been the primary Aeroplan credit card issuer for more than 20 years.

The three companies have been in negotiations for weeks, following Aimia’s decision to pick TD as the primary issuer of Aeroplan Visa credit cards for a 10-year term, starting Jan. 1, 2014.

CIBC objected to the decision and the three parties agreed to seek a compromise agreement.

Aimia says about $312.5 million will be paid to CIBC for the shift of half its Aeroplan cards portfolio to TD, with Aimia funding about $150 million of the payments.

TD will pay $162.5 million, including $50 million when the deal closes. The rest will be paid over three years – about $37.5 million annually.

CIBC says it also plans to introduce an enhanced travel loyalty rewards card.

Brands Articles

RBC Rewards aims to get in front of ‘back to school’ rush

Bank speaks to potentially unending student wants in new video from Grip

Indochino’s big move into bricks-and-mortar (Q&A)

CMO Peter Housley on why the ecommerce menswear company is setting up shop

Holt Renfrew’s rich rewards for loyal customers

Icon Privileges offers experiences to reward its best customers and attract new ones

Samsung to open first retail store in Ontario

New 'experience store' aims to bring the electronics brand to life

Millennial-ized market means Kraft Dinner is now KD

Low-risk name change drives brand update across 27 products

Jaguar Land Rover picks Mint

Toronto shop becomes automaker's first agency of record in 15 years

Toronto yoga junky finds her Flow for online contest

Bottled water brand wraps its social media contest after finding The Chi Junky

Working myself out of a job (Column)

In an ideal world, a good company may not need a PR firm. In reality...

Corby dedicates 50% of digital spend to programmatic

Booze brands make a big shift online with new media and platform partners