EQ Bank's parent company, EQB, received approval from the Finance Minister on Tuesday to buy PC Financial, completing a regulatory review of the deal.CHRIS HELGREN/Reuters
Canada’s seventh-largest bank has secured its final regulatory approval to buy PC Financial from Loblaw Cos. Ltd. L-T, clearing the way for the transformative deal.
EQ Bank owner EQB Inc. EQB-T said Tuesday that the approval from the federal Finance Minster follows green lights from the federal banking regulator and the Competition Bureau for the deal first announced by the companies in December.
“We applaud the swift actions of the federal government to enable us to move with pace to drive improvement in banking competition, affordability and innovation for Canadians,” said Chadwick Westlake, chief executive of EQ Bank, in a news release.
EQ Bank now expects the deal to close this summer, but says there will be no immediate changes for customers once the deal is done.
The bank had previously said it expected to close the deal sometime this year, but hoped that the government would move quickly on the file.
The $800-million cash-and-share deal will see EQ Bank take over PC Financials’ Mastercard and banking customers, boosting its customer base from around 800,000 to 3.3 million.
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The EQ Bank brand will replace PC Financial at Loblaw grocery store retail pavilions and ATMs and EQ Bank will become the exclusive financial partner of the 18-million-member Optimum loyalty program. Loblaw will also take a 16-per-cent stake in the bank to create a strategic relationship between the two firms as well as satisfy the share portion of the payment.
EQ Bank said that the acquisition will increase its assets by about $5.8-billion and its retail deposits by $800-million.
It currently has about $142-billion in combined assets under management and administration.
Loblaw chief financial officer Richard Dufresne said in the news release that the deal will unlock significant benefits for PC Financial customers and PC Optimum members, including a wider variety of products, services and ways to earn rewards, while gaining access to EQ Bank’s digital banking platform.