EQB and Loblaw announced the completion of EQB’s acquisition of President’s Choice Bank, PC Financial Insurance Agency, PC Financial Insurance Broker, and certain affiliated entities of PC Bank from Loblaw.
The transaction expands EQB’s scale to serve nearly 4 million Canadians and broadens its portfolio of financial services.
The acquisition also marks the start of EQB’s long-term strategic relationship with Loblaw.
Through the deal, EQB becomes the exclusive financial services partner for the PC Optimum loyalty program, which has more than 18 million active members.
In connection with the acquisition, EQB added two Loblaw nominees to its Board of Directors.
The new board members are Galen G. Weston, Chairman and CEO of George Weston Limited and Chairman of Loblaw, and Richard Dufresne, President and CFO of George Weston Limited and CFO of Loblaw.
Under the agreement, EQB acquired PC Financial at 1.15 times book value.
The consideration was satisfied through the issuance of 7.2 million EQB common shares to Loblaw and C$234.5 million in cash.
PC Bank is now a wholly owned subsidiary of Equitable Bank.
EQB said its third-quarter results will include one month of earnings contribution from PC Financial.
There will be no immediate changes to the banking experience for PC Bank customers.
The way customers earn and redeem PC Optimum points will also remain the same.
PC Financial’s approximately 180 in-store banking pavilions and more than 600 additional ATMs at Loblaw retail locations will continue operating in the normal course.
EQ Bank’s existing customers will continue using the same digital banking experience, products, and everyday value.
The PC Optimum program will continue to be owned and operated by Loblaw, and the value of PC Optimum points remains unchanged.
In the coming months, EQB and Loblaw will begin planning conversion activities, including transitioning PC Bank clients to the EQ Bank platform and introducing new ways for customers to unlock value across the integrated platforms and PC Optimum ecosystem.
Immediately before the acquisition, Loblaw had beneficial ownership or control over 1,220,000 EQB common shares, representing about 3.46% of EQB’s issued and outstanding common shares.
After the acquisition, Loblaw has beneficial ownership or control over 8,457,601 EQB common shares, representing about 19.89% of EQB’s issued and outstanding common shares.
Under an investor rights agreement, Loblaw intends to acquire up to 25% of the EQB common shares issued and outstanding.
EQB is a Canadian financial services company with approximately C$150 billion in combined assets under management and administration.
EQB is the parent company of Equitable Bank, Canada’s seventh-largest Schedule I bank by assets, which operates EQ Bank.
Loblaw is Canada’s food and pharmacy leader and largest retailer, with more than 2,800 locations and over 220,000 full- and part-time employees.
KEY QUOTES:
“Today, as we celebrate Canada Day, we mark a turning point for Canadian banking. This is about scaling growth to elevate competition – bringing more choice, better value and rewards for everyday Canadians. The next chapter of EQB’s evolution as Canada’s Challenger Bank starts now.”
Chadwick Westlake, President and CEO of EQB
“It is a privilege to welcome Galen and Richard to the Board. Their deep expertise leading one of the country’s largest and most recognizable companies will be instrumental as EQB executes its focused growth strategy, scaling with purpose and discipline.”
Mike Pedersen, Chair of the Board of Directors of EQB
