Power Corporation of Canada (TSX:POW) entered into a definitive agreement to acquire remaining 35.9% stake in Power Financial Corporation (TSX:PWF) from Power Financial Corporation minority shareholders for CAD 8 billion on December 12, 2019. As per the terms of the agreement, each common share of Power Financial Corporation (PFC) held by holders of Power Financial Corporation common shares other than Power Corporation of Canada (PCC) , will be exchanged for 1.05 Subordinate Voting Shares of Power Corporation of Canada and CAD 0.01 in cash. As of January 10, 2020, 425.4 million shares of PFC are beneficially owned, directly or indirectly, by PCC or its wholly-owned Subsidiaries. Upon completion of the transaction, PCC will own all of the PFC Common Shares, while PFC preferred shares and debt securities will remain outstanding. Following completion of the transaction, Power Corporation of Canada and Power Financial Corporation intend to redeem an aggregate of CAD 350 million of their respective First Preferred Shares with available cash.

Paul Desmarais Jr. and André Desmarais have decided to retire as Co-Chief Executive Officers of Power Corporation of Canada, and will maintain their positions as Chairman and Deputy Chairman, respectively, of Power Corporation of Canada's Board of Directors. Power Corporation of Canada's Board of Directors has indicated that it will appoint R. Jeffrey Orr, current President and Chief Executive Officer of Power Financial Corporation, as President and Chief Executive Officer of Power Corporation of Canada. The transaction is subject to approval by the shareholders of PFC and PCC, court approval, regulatory approval, the time period for the exercise of the Dissent Rights shall have expired and PFC shareholders shall not have exercised (or otherwise be deemed to have exercised) Dissent Rights with respect to more than 3% of the number of issued and outstanding PFC shares. As of December 13, 2019, the transaction has been unanimously approved by the Board of PCC and PFC. Board of Directors of PFC, based on the unanimous recommendation of the Special Committee, has agreed to unanimously recommend that PFC minority shareholders vote in favor of the transaction. Concurrently with the execution of this Agreement, the PFC supporting shareholders have entered into the Voting and Support Agreements with PCC and Pansolo Holdings Inc. has entered into the Pansolo Voting and Support Agreement with PCC and PFC. As of January 10, 2020, PFC's shareholder meeting will held on February 7, 2020. As of February 11, 2020, the transaction was approved by shareholders of Power Financial Corporation. The final hearing of the Ontario Superior Court of Justice to approve the transaction is scheduled to take place on February 12, 2020. As of January 10, 2020, the transaction is expected to close in February 2020. As of February 11, 2020, the transaction is expected to close on February 13, 2020.

John Tuzyk and Geoff Belsher of Blake, Cassels & Graydon LLP and Neill May of Goodmans LLP acted as legal advisors to PCC. Jeremy Fraiberg of Osler, Hoskin & Harcourt LLP acted as legal advisor and RBC Dominion Securities Inc. acted as fairness opinion provider and financial advisor for PFC. BMO Capital Markets and Goldman Sachs Canada Inc. acted as financial advisor to PCC. Kingsdale Advisors acted as information agent to PFC. PFC will pay approximately CAD 0.1 million as a fees to Kingsdale.

Power Corporation of Canada (TSX:POW) completed the acquisition of remaining 35.9% stake in Power Financial Corporation (TSX:PWF) from Power Financial Corporation minority shareholders on February 13, 2020. Power Financial Corporation will be delisted from the TSX as a result of the transaction. Power Financial Corporation will remain a reporting issuer in all of the provinces and territories of Canada and its first preferred shares will remain outstanding shares. Following the transaction, Power Corporation of Canada and Power Financial Corporation will redeem an aggregate of CAD 350 million of Power Corporation of Canada's and Power Financial Corporation's first preferred shares with available cash.