Air Canada (TSX:AC), The Toronto-Dominion Bank (TSX:TD), Canadian Imperial Bank of Commerce (TSX:CM) and Visa Canada Corporation (together, the Consortium) made a proposal to acquire Aeroplan loyalty program business of Aimia Inc. (TSX:AIM) for CAD 2.3 billion on July 25, 2018. The total purchase price includes CAD 250 million in cash and the assumption of approximately CAD 2 billion of Aeroplan points liability. On August 21, 2018, the Consortium entered into an agreement in principle to acquire the Aeroplan loyalty program business of Aimia for CAD 2.4 billion. Under the terms of the agreement, the aggregate purchase price comprises CAD 450 million in cash on a cash-free, debt-free basis plus the assumption of approximately CAD 1.9 billion of Aeroplan Miles liability. On November 26, 2018, the Consortium entered into a definitive share purchase agreement to acquire Aimia Canada Inc., owner and operator of the Aeroplan loyalty business, for CAD 450 million in cash, subject to post-closing adjustments, and the assumption of approximately CAD 1.9 billion of Aeroplan Miles liability. The consortium will own all of the issued and outstanding share capital of Aimia Canada post completion. Air Canada will receive payments from TD and CIBC in the aggregate amount of CAD 822 million. Visa will also be making a payment to Air Canada. In addition, TD and CIBC will make payments to Air Canada, at closing, in the aggregate amount of CAD 400 million as prepayments to be applied towards future monthly payments in respect of Aeroplan miles. As part of the agreement, the Consortium will deposit a sum of CAD 2.25 million in escrow amount. Concurrently with the signing of the share purchase agreement, the Consortium signed various commercial agreements relating to the acquisition, including credit card loyalty program and network agreements for future participation in Air Canada's new loyalty program, all of which are conditional upon closing of the acquisition of Aimia Canada. If this agreement is terminated by Aimia, then the purchaser is entitled to receive CAD 65 million.

The transaction is subject to satisfactory conclusion of definitive transaction documents, due diligence, receipt of customary regulatory approvals, the negotiation and completion by the Consortium of credit card loyalty program and network agreements for future participation in Air Canada's new loyalty program, Aimia shareholder approval, third party approval and other customary closing conditions. The shareholders of Aimia were advised by Aimia Board not to take any action with respect to the proposal. On August 2, 2018, Aimia rejected the bid offered by the Consortium. On August 3, 2018, the original cash consideration was updated to CAD 325 million; however Aimia proposed it to be around CAD 450 million and includes revised terms that remove all uncertainty from discussions with the Consortium. On August 21, 2018, the agreement in principle was approved unanimously by Aimia's Board of Directors upon recommendation by its special committee of independent directors. Mittleman Brothers LLC, a 17.6% shareholder of Aimia, has provided a lock-up and support agreement under which it has agreed to vote its shares in favour of the proposed transaction. As of December 24, 2018, Air Canada cleared regulatory requirements following the receipt of the required confirmation under the Canada Transportation Act and a "no action letter" is issued by the Canadian Competition Bureau. The closing is subject to the satisfaction of customary conditions as well as Aimia shareholder approval which will be sought by Aimia at its special meeting of shareholders scheduled for January 8, 2019. As on January 8, 2019, the shareholders of Aimia granted their approval on the transaction. All the regulatory and government approvals have now been received. The Board of Directors of Aimia has formed a special committee of independent Directors in connection with engagement and discussions regarding the deal. The closing of the acquisition is expected to occur in January 2019. As of December 5, 2018, the transaction is expected to close on January 10, 2019. With all approvals now received, the transaction is expected to close in the coming days.

Neil Kravitz, Costa Ragas, Claude Jodoin, Stephen D.A. Clark, Huy Do, Jon Pecman, Samuel Rickett, Luc Beliveau, Kathleen Butterfield, Frédérique Tremblay, Janie Harbec, Paul Cabana, Taj Kudhail, Frédéric Barriault, Huy Do, Chris Margison and Jenna Ward of Fasken Martineau DuMoulin LLP acted as legal advisors to Air Canada. TD Securities Inc. acted as financial advisor to the Consortium on the transaction. RBC Capital Markets and Moelis & Company acted as financial advisors to Aimia. Alfred Page and Andrew McLean from Borden Ladner Gervais LLP served as legal advisors to Mittleman Brothers. Kingsdale Advisors acted as proxy solicitor to Aimia in the transaction. Elliot Shapiro, Stephen Kelly, Amar Leclair-Ghosh, Peter Wiazowski, Andrea Brewer, Robert Percival, Meghan Stewart, Stephen Nattrass, Julia Godolphin and Carl Boulva of Norton Rose Fulbright Canada LLP acted as legal advisors to Aimia. Gagnier Communication LLC acted as legal advisor to Air Canada. Marie-Andrée Beaudry, Jean-Guillaume Shoone and Nicholas Blach of Stikeman Elliott LLP acted as legal advisors to Aimia Inc. (TSX:AIM).

Air Canada (TSX:AC), The Toronto-Dominion Bank (TSX:TD), Canadian Imperial Bank of Commerce (TSX:CM) and Visa Canada Corporation completed the acquisition of Aeroplan loyalty program business of Aimia Inc. (TSX:AIM) on January 10, 2019. Gross transaction proceeds at closing amounted to approximately CAD 497 million, after initial closing adjustments of CAD 47 million which were primarily related to favourable working capital adjustments relative to the target working capital set out in the share purchase agreement. Aimia does not expect any capital gains tax to be payable on the transaction. The final purchase price remains subject to certain post-closing adjustments, including for working capital and the miles-related redemption liability. Approximately half of Aimia's total headcount of 1,500 at year end 2018 will transition to Air Canada as a result of the transaction. At closing, approximately CAD 308 million of the proceeds were used to repay and terminate Aimia's credit facility and to decease and redeem all of its outstanding Senior Secured Notes. McCarthy Tétrault LLP acted as legal advisor to CIBC. Miltom Management LP acted as legal advisor to Visa Canada. Torys LLP acted as legal advisor to Consortium. Osler, Hoskin & Harcourt LLP acted as legal advisor to The Toronto-Dominion Bank.