Citigroup Inc said today that it would sell its Diners Club North America credit card business to Canada's Bank of Montreal's BMO Financial (BMO) for an undisclosed sum as part of its ongoing plan to shed non core assets.
The deal gives Montreal-based BMO exclusive rights to issue Diners cards in the US and Canada, which will expand BMO's corporate credit card business.
Terms of the deal were not disclosed. The sale is anticipated to reduce Citi's assets in Citi Holdings by approximately $1 billion and is not expected to have a material impact on Citi's net income or capital ratios.
The transaction is expected to close by March 31, 2010 and is subject to regulatory approvals and customary closing conditions, said the bank in a statement.
The New York-based bank is shedding assets after it took $45 billion in a series of bailouts from the US government.
The sale of this business is consistent with Citi's strategy to optimize the assets and businesses within Citi Holdings while working to generate long-term profitability and growth from Citicorp, which comprises its core franchise.
Last week, the bank agreed to sell its stake in Japanese call-centre operator Bellsystem24 to US private equity firm Bain Capital for 93.5 billion yen ($1.12 billion) (See: Citigroup to sell stake in Bellsystem24 to Bain Capital for $1.12 billion) and in April 2009, Citigroup sold its Japanese brokerage unit Nikko Cordial broker Nikko Cordial, a fund management firm and a trust bank to the Sumitomo Trust and Banking for $1.3 billion. (See: Citi seeks to sell its brokerage unit Nikko Cordial: report)
Citi said today that it continues to make progress on its strategy and will continue to pursue opportunities within Citi Holdings that create the most value for stakeholders.
Citi, the leading global financial services company, has approximately 200 million customer accounts and does business in more than 140 countries.