EQB Inc. and Loblaw Companies Limited have entered into a definitive agreement where EQB will acquire President’s Choice Bank, PC® Financial Insurance Agency Inc., PC® Financial Insurance Brokers Inc. and certain other affiliated entities of PC Bank.
In connection with the closing of the acquisition, EQB will enter into a long-term strategic relationship with Loblaw pursuant to a commercial agreement to become the exclusive financial partner of the PC Optimum™ loyalty program. The transaction will unite two of Canada’s most innovative banking brands, redefining the sector by delivering extraordinary value, products and services to Canadians, according to a news release.
EQB will acquire PC Financial for 1.15x book value at closing, excluding excess capital above a 13% CET1 ratio, for consideration estimated at $800 million. The consideration will be satisfied by the issuance to one or more subsidiaries of Loblaw of 7.2 million common shares of EQB, representing approximately 16% of EQB’s issued and outstanding common shares as at the date hereof on a pro-forma basis, and the remainder in cash. In addition, prior to the closing of the transaction and subject to regulatory approval, Loblaw will release and receive approximately $500 million of excess capital and other value from PC Bank, for estimated total value of $1.3 billion to Loblaw.
Loblaw will own a minimum of 17% of EQB’s issued and outstanding common shares on closing of the acquisition. Closing is expected to occur within 2026, subject to customary closing conditions and regulatory approvals.
EQB will acquire PC Financial’s products and services, including the PC Mastercard™ portfolio – one of the largest and most recognizable credit card portfolios in Canada with more than two million active accounts. The acquisition is expected to expand EQB’s total customer base to nearly 3.5 million Canadians and add $5.8 billion in assets with more than $800 million in direct retail deposits.
“(The) announcement marks a new era for banking in Canada. By combining EQ Bank’s exceptional digital platform and product shelf with PC Financial’s spending solutions, distribution and expertise in loyalty, we’re creating a better banking ecosystem for all Canadians that prioritizes innovation and value,” said Chadwick Westlake, President and CEO, EQB. “Fueled by our combined digital strengths and new ways to connect with customers, this transaction offers a unique opportunity for Canada’s Challenger Bank to redefine what Canadians should expect from their banks. We couldn’t be more excited to bring challenger banking to more Canadians and look forward to welcoming Loblaw as a shareholder and valued long-term partner.”
“This new relationship between EQB and Loblaw will yield significant benefits to our customers, and those of EQ Bank. PC Financial’s products will be better positioned for long-term growth under EQB’s ownership, while maintaining the high level of quality and care our customers expect,” said Richard Dufresne, Chief Financial Officer of Loblaw. “Bringing together EQB’s digital platform with PC Optimum’s reach and personalization will bring more value and more rewards to Canadians.
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