Agreement designed to grow retail and financial services businesses,
provide significant benefits to customers and facilitate closer
collaboration to enhance customer affinity for both brands
TORONTO, May 8, 2014 /CNW/ - Canadian Tire Corporation, Limited
(TSX:CTC, TSX:CTC.a) and Scotiabank (TSX: BNS, NYSE: BNS) today
announced a far-reaching strategic partnership that creates
unprecedented opportunities for joint marketing to drive new business
growth. The agreement will see Scotiabank acquire a 20% equity interest
in Canadian Tire's financial services business for $500 million in
cash. Scotiabank will also provide a funding commitment to Canadian
Tire's financial services business with credit card receivable
financing of up to $2.25 billion.
"The real strength of our partnership with Scotiabank lies in the
opportunity it creates to benefit our retail customers and grow our
business," said Stephen Wetmore, Chief Executive Officer, Canadian Tire
Corporation. "By working together and innovating, we will better serve
our customers, earn new business, and strengthen our community
initiatives."
Canadian Tire's financial services division is the eighth largest credit
card issuer in Canada with $4.4 billion in receivables, 1.8 million
active customer accounts and $12 billion in annual spend volume. The
agreement also provides an option for Canadian Tire to sell up to an
additional 29% of its financial services business to Scotiabank within
the next 10 years at the then fair market value.
"We are excited about the possibilities that come with this partnership.
Canadian Tire is an iconic company with an incredibly strong brand and
great customer focus," said Brian Porter, President and Chief Executive
Officer, Scotiabank. "This is a strategic investment in a high
performing business and a partnership with the Canadian Tire family of
companies will provide opportunities for us to grow our customer base
and provide unique and relevant solutions to our customers."
The investment in the financial services business will be funded from
Scotiabank's cash resources and is expected to be modestly accretive to
Scotiabank's earnings. The deal is subject to customary closing
conditions and regulatory approvals and the transaction is expected to
close by September 30, 2014.
Marketing Agreement
Scotiabank will become the exclusive partner for new financial products
to the Canadian Tire portfolio of customers. The agreement allows for
joint marketing efforts to introduce the companies' respective
customers to each other's brands with exclusive offers. Available only
to customers of the Canadian Tire family of companies and Scotiabank,
the offers are expected to attract new customers and provide more value
to loyal consumers.
Today, the companies announced two inaugural offers available from May 9
to August 31, 2014 to celebrate the new partnership:
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New customers who join the Scotiabank Start Right Program, which
provides new Canadians with a bank account, credit card and other
financial services, will receive $50 at Canadian Tire and $50 at Mark's
to help them buy every day essentials for life in Canada.
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Through Canadian Tire, Scotiabank will offer $500 in Canadian Tire Money
to any Canadian Tire Options MasterCard holders who switch or take a
new five-year mortgage from Scotiabank.
Canadian Tire and Scotiabank share a strong understanding of customer
needs and what drives consumer decisions. With a rapidly changing
consumer and digital landscape, there are significant benefits to
working together to develop new online and mobile payment technologies
that will benefit both retail and banking customers.
Both brands are committed to giving back to communities, investing in
grassroots hockey and helping families in need. The companies share the
belief that local investments help build strong communities and will
work together on opportunities to celebrate sport and maximize
sponsorship activity from coast-to-coast.
CANADIAN TIRE CORPORATION FORWARD-LOOKING STATEMENTS
This document contains forward-looking information that reflects
management's current expectations related to the business partnership
with Scotiabank. Forward-looking statements are provided for the
purposes of providing information about management's current
expectations and plans and allowing investors and others to get a
better understanding of the Company's anticipated financial position,
results of operations and operating environment. Readers are cautioned
that such information may not be appropriate for other purposes.
All statements other than statements of historical facts included in
this document may constitute forward-looking information, including but
not limited to, statements regarding the expected benefits of the
partnership between the Company and Scotiabank, such as the growth of the retail and financial services businesses,
significant benefits to customers, the enhancement of brand affinity
among customers, the integration of marketing, sponsorships, and
community contributions, the collaboration on technological solutions
and other statements concerning management's expectations relating to
possible or assumed future prospects and results, our strategic goals
and priorities, our actions and the results of those actions and the
economic and business outlook for us. Often but not always,
forward-looking information can be identified by the use of
forward-looking terminology such as "may", "will", "expect", "believe",
"estimate", "plan", "could", "should", "would", "outlook", "forecast",
"anticipate", "foresee", "continue" or the negative of these terms or
variations of them or similar terminology. Forward-looking information
is based on the reasonable assumptions, estimates, analyses, beliefs
and opinions of management made in light of its experience and
perception of trends, current conditions and expected developments, as
well as other factors that management believes to be relevant and
reasonable at the date that such information is provided.
By its very nature, forward-looking information requires us to make
assumptions and is subject to inherent risks and uncertainties, which
give rise to the possibility that the Company's assumptions, estimates,
analyses, beliefs and opinions may not be correct and that the
Company's expectations and plans will not be achieved. Although the
Company believes that the forward-looking information in this document
is based on information, assumptions and beliefs which are current,
reasonable and complete, this information is necessarily subject to a
number of factors that could cause actual results to differ materially
from management's expectations and plans as set forth in such
forward-looking information for a variety of reasons. Some of the
factors - many of which are beyond our control and the effects of which
can be difficult to predict - include, but are not limited to, changes
in economic and market conditions, the possibility that the anticipated
benefits and synergies from the partnership cannot be realized or may
take longer to realize than expected and other risks and uncertainties
discussed in the Company's materials filed with the Canadian securities
regulatory authorities from time to time, including the "Risk Factors"
section of our Annual Information Form for fiscal 2013 and our 2013
Management's Discussion and Analysis, as well as the Company's other
public filings, available at www.sedar.com and at www.corp.canadiantire.ca.
Investors and other readers are urged to consider the foregoing risks,
uncertainties, factors and assumptions carefully in evaluating the
forward-looking information and are cautioned not to place undue
reliance on such forward-looking information. The forward-looking
statements and information contained herein are based on certain
factors and assumptions as of the date hereof. The Company does not
undertake to update any forward-looking information, whether written or
oral, that may be made from time to time by it or on its behalf, to
reflect new information, future events or otherwise, unless required by
applicable securities laws.
SCOTIABANK FORWARD-LOOKING STATEMENTS
Our public communications often include oral or written forward-looking
statements. Statements of this type are included in this document, and
may be included in other filings with Canadian securities regulators or
the United States Securities and Exchange Commission, or in other
communications. All such statements are made pursuant to the "safe
harbour" provisions of the United States Private Securities Litigation
Reform Act of 1995 and any applicable Canadian securities legislation.
Forward-looking statements include, but are not limited to, statements
made in this document, the Management's Discussion and Analysis in the
Bank's 2013 Annual Report under the headings "Overview - Outlook", for
Group Financial Performance "Outlook", for each business segment
"Outlook" and in other statements regarding the Bank's objectives,
strategies to achieve those objectives, expected financial results
(including those in the area of risk management), and the outlook for
the Bank's businesses and for the Canadian, United States and global
economies. Such statements are typically identified by words or phrases
such as "believe", "expect", "anticipate", "intent", "estimate",
"plan", "may increase", "may fluctuate", and similar expressions of
future or conditional verbs, such as "will", "should", "would" and
"could".
By their very nature, forward-looking statements involve numerous
assumptions, inherent risks and uncertainties, both general and
specific, and the risk that predictions and other forward-looking
statements will not prove to be accurate. Do not unduly rely on
forward-looking statements, as a number of important factors, many of
which are beyond our control, could cause actual results to differ
materially from the estimates and intentions expressed in such
forward-looking statements. These factors include, but are not limited
to: the economic and financial conditions in Canada and globally;
fluctuations in interest rates and currency values; liquidity;
significant market volatility and interruptions; the failure of third
parties to comply with their obligations to us and our affiliates; the
effect of changes in monetary policy; legislative and regulatory
developments in Canada and elsewhere, including changes in tax laws;
the effect of changes to our credit ratings; amendments to, and
interpretations of, risk-based capital guidelines and reporting
instructions and liquidity regulatory guidance; operational and
reputational risks; the risk that the Bank's risk management models may
not take into account all relevant factors; the accuracy and
completeness of information the Bank receives on customers and
counterparties; the timely development and introduction of new products
and services in receptive markets; the Bank's ability to expand
existing distribution channels and to develop and realize revenues from
new distribution channels; the Bank's ability to complete and integrate
acquisitions and its other growth strategies; changes in accounting
policies and methods the Bank uses to report its financial condition
and financial performance, including uncertainties associated with
critical accounting assumptions and estimates (see "Controls and
Accounting Policies - Critical accounting estimates" in the Bank's 2013
Annual Report, as updated in this document); the effect of applying
future accounting changes (see "Controls and Accounting Policies -
Future accounting developments" in the Bank's 2013 Annual Report, as
updated in this document); global capital markets activity; the Bank's
ability to attract and retain key executives; reliance on third parties
to provide components of the Bank's business infrastructure; unexpected
changes in consumer spending and saving habits; technological
developments; fraud by internal or external parties, including the use
of new technologies in unprecedented ways to defraud the Bank or its
customers; consolidation in the Canadian financial services sector;
competition, both from new entrants and established competitors;
judicial and regulatory proceedings; acts of God, such as earthquakes
and hurricanes; the possible impact of international conflicts and
other developments, including terrorist acts and war on terrorism; the
effects of disease or illness on local, national or international
economies; disruptions to public infrastructure, including
transportation, communication, power and water; and the Bank's
anticipation of and success in managing the risks implied by the
foregoing. A substantial amount of the Bank's business involves making
loans or otherwise committing resources to specific companies,
industries or countries. Unforeseen events affecting such borrowers,
industries or countries could have a material adverse effect on the
Bank's financial results, businesses, financial condition or liquidity.
These and other factors may cause the Bank's actual performance to
differ materially from that contemplated by forward-looking statements.
For more information, see the "Risk Management" section starting on
page 60 of the Bank's 2013 Annual Report.
Material economic assumptions underlying the forward-looking statements
contained in this document are set out in the 2013 Annual Report under
the headings "Overview - Outlook", as updated in this document; and for
each business segment "Outlook". These "Outlook" sections are based on
the Bank's views and the actual outcome is uncertain. Readers should
consider the above-noted factors when reviewing these sections.
The preceding list of important factors is not exhaustive. When relying
on forward-looking statements to make decisions with respect to the
Bank and its securities, investors and others should carefully consider
the preceding factors, other uncertainties and potential events. The
Bank does not undertake to update any forward-looking statements,
whether written or oral, that may be made from time to time by or on
its behalf.
Additional information relating to the Bank, including the Bank's Annual
Information Form, can be located on the SEDAR website at www.sedar.com and on the EDGAR section of the SEC's website at www.sec.gov.
ABOUT CANADIAN TIRE
Canadian Tire Corporation, Limited, (TSX:CTC.A) (TSX:CTC) or "CTC," is a
family of businesses that includes a retail segment, a financial
services division, CT REIT and Canadian Tire Jumpstart, a nationally
registered charity dedicated to removing financial barriers so kids
across Canada can participate in sports and physical activities. Our
retail business is led by Canadian Tire, which was founded in 1922 and
provides Canadians with products for life in Canada across its Living,
Playing, Fixing, Automotive and Seasonal categories. PartSource and
Gas+ are key parts of the Canadian Tire network. The retail segment
also includes Mark's, a leading source for casual and industrial wear,
and FGL Sports (Sport Chek, Hockey Experts, Sports Experts, National
Sports, Intersport, Pro Hockey Life and Atmosphere), which offers the
best active wear brands. The nearly 1,700 retail and gasoline outlets
are supported and strengthened by our Financial Services division and
the tens of thousands of people employed across the Company. For more
information, visit Corp.CanadianTire.ca.
ABOUT SCOTIABANK
Scotiabank is a leading financial services provider in over 55 countries
and Canada's most international bank. Through our team of more than
83,000 employees, Scotiabank and its affiliates offer a broad range of
products and services, including personal and commercial banking,
wealth management, corporate and investment banking to over 21 million
customers. With assets of $783 billion (as at January 31, 2014),
Scotiabank trades on the Toronto (BNS) and New York Exchanges (BNS).
Scotiabank distributes the Bank's media releases using Marketwired. For
more information please visit www.scotiabank.com.
SOURCE CANADIAN TIRE CORPORATION, LIMITED
