TD Bank Buys About 50% Of Existing Aeroplan Credit Card Portfolio From CIBC

(RTTNews) - TD Bank Group (TD, TD.TO) and Aimia Inc., Friday said, it has completed the previously announced transaction under which TD acquired approximately 50 percent of the existing Aeroplan credit card portfolio from Canadian Imperial Bank of Commerce (CM).

The purchase price is estimates to be around $162.5 million, which includes a payment of $50 million, reflecting a price of par plus $50 million for the CIBC Aeroplan accounts, as well as a commercial subsidy agreement that will see TD pay CIBC a further $112.5 million plus HST over three years.

The portion of CIBC's Aeroplan credit card portfolio primarily includes accounts held by customers who do not have an existing retail banking relationship with CIBC. TD will now become the primary issuer of Aeroplan Visa credit cards on January 1, 2014.

TD expects that the agreements with CIBC and Aimia Inc. will contribute approximately 10 cents per share to 2014 earnings on an adjusted basis, and to be dilutive by approximately 7 cents per share on a reported basis.