EQB to acquire PC Financial from Loblaw for about $800M

Canada's seventh-largest bank has agreed to acquire PC Financial from Loblaws Co. Ltd. in the latest deal to shake up the country's financial landscape.

Canada’s seventh-largest bank has agreed to acquire PC Financial from Loblaws Co. Ltd. in the latest deal to shake up the country’s financial landscape.

EQB Inc., the company behind digital EQ Bank, is paying $800 million in shares and cash in a deal that will see Loblaw take about a 16 per cent stake in the bank while EQ will become the exclusive financial partner of the PC Optimum loyalty program.

“Today’s announcement marks a new era for banking in Canada,” said EQB chief executive Chadwick Westlake in a statement.

“We’re creating a better banking ecosystem for all Canadians that prioritizes innovation and value.”The deal is substantial for EQ Bank, which is the last of the smaller publicly-traded banks left in Canada after Laurentian Bank announced Tuesday it was being split up and sold to Fairstone Bank and National Bank. Other banks bought up in recent years include Canadian Western Bank and HSBC Canada.

The deal will expand EQ’s customer base by about 3.5 million, including more than two million active PC Mastercard clients, compared with EQ Bank’s customer base of 607,000. It also adds about $5.8 billion in assets to EQB’s existing $138 billion in assets.

It will acquire President’s Choice Bank, PC Financial Insurance Agency Inc., PC Financial Insurance Brokers Inc. and other entities of PC Bank.

The deal allows Loblaw to focus on its core retail business while positioning PC Financial products for better long-term growth, said Loblaw CFO Richard Dufresne said in a statement.

“This partnership with EQ Bank allows us to pair one of Canada’s most loved loyalty programs and suite of financial products with a true leader in digital banking.”