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:
- 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.
- 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