Opinion on BMO Air miles purchase on DIV Q: Hi There
Is the recent acquisition of Air Miles by BMO a positive, negative or neutral transaction for DIV?
Thanks Robert
Asked by Robert on March 13, 2023
5I RESEARCH ANSWER:
It is likely positive, but will ultimately depend on what BMO plans for it down the road. All of DIV's rights and royalties remain intact, and AirMiles remains current in its payments to DIV. Certainly having the division owned by a stronger entity is a net positive in the short term, but at this time we are not sure if BMO plans any changes to the program. But the agreement on royalties will transfer to the new owner, and we BMO is not buying AirMiles to shut it down, more so to compete with other bank-sponsored programs.