Citigroup to Buy Federated, May Credit Card Portfolios

Share this content:
Citigroup Inc. will acquire all the accounts in the credit card portfolios of Federated Department Stores Inc. and The May Department Store Company, Cincinnati-based Federated reported yesterday.


The credit card businesses have a combined $6.6 billion in receivables and 17 million active accounts. Citigroup will buy them in three transactions and is expected to pay an 11.5 percent premium, or about $760 million. Federated said it expects after-tax proceeds of about $4.5 billion from the sale, which it plans to use to fund its acquisition of May.


Federated and Citigroup also entered into a multi-year agreement to co-manage the accounts that provides for Federated to receive ongoing payments based on credit sales and other performance metrics of the credit portfolio after the sale is completed.


The two companies also will work together on marketing initiatives designed to accelerate Federated's same-store sales gains and credit growth.


No changes are planned for Federated's credit card or loyalty reward programs as a result of this transaction.


Chantal Todé covers catalog and retail news and BTB marketing for DM News and DM News.com. To keep up with the latest developments in these areas, subscribe to our daily and weekly e-mail newsletters by visiting www.dmnews.com/newsletters


close

Next Article in Multichannel Marketing

Sign up to our newsletters

Company of the Week

Since 1985, Melissa has helped thousands of companies clean, correct and complete contact data to better target and communicate with their customers. We offer a full spectrum of data quality solutions, including global address, phone, email, and name validation, identify verification - available for batch or real-time processes, in the Cloud or on-premise. Our service bureau provides dedupe, email/phone append and geographic/demographic append services for better targeting and insight. For direct mailers, Melissa offers easy-to-use address management/postal software, list hygiene services and 100s of specialty mailing lists - all with competitive pricing and excellent customer service.

Find out more here »

Career Center

Check out hundreds of exciting professional opportunities available on DMN's Career Center.  
Explore careers in digital marketing, sales, eCommerce, marketing communications, IT, data strategies, and much more. And don't forget to update your resume so employers can contact you privately about job opportunities.

>>Click Here