Citigroup to Buy Sears Credit Card Business for $6 Billion

Share this content:
Citigroup agreed to buy the $29 billion credit card portfolio of Sears, Roebuck and Co. for $6 billion cash, the companies said yesterday.

Under terms of the deal, Citigroup will acquire the MasterCard issuing business of Sears and its store label accounts. The companies also will enter into a long-term marketing and servicing alliance that Sears expects will generate $200 million in annual performance payments from Citigroup based on factors such as new accounts and credit sales generation.

Sears' domestic credit card business includes 59 million accounts, of which 23 million are active. This portfolio is described as the eighth largest in the United States and includes the largest remaining in-house private-label portfolio. The Sears proprietary card and Sears MasterCard will continue to be offered through Citigroup.

Sears, Hoffman, IL, will use the proceeds to retire debt, return cash to shareholders and for "general corporate purposes." After retirement of debt, the company expects that $4 billion to $4.5 billion in cash will be available.

Sears also expects to save more than $200 million annually with Citigroup absorbing costs associated with Sears' zero percent financing program.

Upon completion of the deal, substantially all 8,300 employees of Sears' Credit and Financial Products business will be employed by Citigroup, which will also assume ownership of the business' operating facilities.

The deal has been approved by both boards of directors and is expected to close by year-end, subject to traditional regulatory review and closing conditions.


Next Article in Multichannel Marketing

Sign up to our newsletters

Company of the Week

We recently were named B2B Magazine's Direct Marketing Agency of the Year, and with good reason: We make real, measureable, positive change happen for our clients. A full-service agency founded in 1974, Bader Rutter expertly helps you get the right message to the right audience at the right time through the right channels. As we engage our clients' audiences along their journey, direct marketing (email, direct mail, phone, SMS) and behavioral marketing (SEM, retargeting, contextual) channels deliver information relevant to the needs of each stage. We are experts at implementing and leveraging marketing technologies such as CRM and marketing automation in order to synchronize sales and marketing communications. Our team of architects and activators plan, execute, measure and adjust in real time to ensure the strategy is working as needed and change things if it's not.

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

Relive the 2017 Marketing Hall of Femme

Click the image above