New York-based Citigroup has completed the final stage of its acquisition of Federated Department Stores credit card portfolio, in a move that solidifies Citigroup's standing as the largest retail partner credit card issuer.
This phase of the acquisition is the second of two transactions in the purchase of The May Department Stores Company credit card receivables from Federated Department Stores.
The purchase price of this final transaction included an 11.5% premium on Federated receivables under management of approximately $950 million at closing and follows the initial purchase of more than $800 million in managed receivables in May.
Under Citigroup and Federated’s long-term agreement, the companies will partner to manage Federated’s credit card business, including existing and new accounts. Citi said that there would be no immediate changes to the Federated card programs or operations.
The Federated and May credit card portfolios consist of about 18 million active accounts and receivables under management of $6.4 billion at closing. Citigroup paid a premium of around11.5% to acquire each of the portfolios.