BMO signs deal to buy Air Miles program in Canada

BMO Financial Group announced a deal Friday to buy the Air Miles loyalty rewards program in Canada, after its U.S. parent company filed for bankruptcy.

Financial terms of the bank’s agreement with LoyaltyOne Co. were not immediately available.

Air Miles president Shawn Stewart said 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 said. “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 impact on reward miles balances or the ability to redeem miles, Stewart added.

Air Miles is one of the oldest and largest loyalty programs in Canada, with nearly 10 million active users.

Yet Air Miles has lost a string of big retailers in Canada in recent years.

Last summer, Sobeys and Safeway owner Empire Co. Ltd. and office supply retailer Staples said they would be scrapping the Air Miles program, a year after the Liquor Control Board of Ontario and Lowe’s Canada pulled out of the program. The Air Miles parent company stock, which was traded on Nasdaq, fell after Sobeys pulled out of the program. 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 Canada.

The process will include a sale and investment solicitation process to seek any other interest in the Air Miles business.