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(Bloomberg) — Blackstone Inc. and a group of Canadian pension funds are buying a 25% stake in Air Canada’s Aeroplan loyalty program for C$2.5 billion ($1.8 billion).
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Other investors in the group include three large Canadian asset managers — the Caisse de Depot et Placement du Quebec, PSP Investments and British Columbia Investment Management Corp., the airline announced Tuesday.
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The announcement confirmed an earlier Bloomberg News report. The deal puts a value of C$10 billion on the Aeroplan business, about C$2.4 billion more than Air Canada’s stock market capitalization.
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Shares of Air Canada rose about 6% on Tuesday to their highest level since 2021 after the story was published. Analysts said a private equity transaction involving Aeroplan would highlight the value of the business.
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Credit card issuers such as American Express Co., Toronto-Dominion Bank and Canadian Imperial Bank of Commerce pay Aeroplan for the right to offer its loyalty points to customers, who exchange them for plane tickets or other perks. Aeroplan has more than 10 million members worldwide who can redeem points on Air Canada or through its partner network of airlines and its hotel and car rental affiliates.
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Canada’s biggest airline said it will use the money to meet an upcoming $1.2 billion bond maturity, as well as for stock buybacks.
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Air Canada will retain control of Aeroplan and will have the right to repurchase the 25% stake between the fifth and eighth anniversaries of the deal’s closing, “as well as upon the occurrence of specified events,” the airline said.
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(Updates with additional context, starting in the third paragraph.)
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