Citi Acquires Big Portfolio
NEW YORK - CitiGroup Inc, the nation's largest VISA and MasterCard issuer, has purchased Sears portfolio of card and financial services business for roughly $32 billion. The deal represents a portfolio of 59 million card accounts, 23 million of which are active. Sears will retain $600 million in bankrupt accounts and accounts that cannot be collected. Citi will also hire the 8,300 employees that Sears has in its card and financial services businesses. Sears is one of the oldest card issuers and financial service firms in the U.S. The purchase means that CitiGroup will be the largest issuer of so-called private cards in the U.S. The switch over from Sears to CitiGroup is expected to be transparent to Sears cardholders. CityGroup paid a 10% premium for the business, which financial analysts have said was good. But analysts also agree that the company has purchased a portfolio rife with problems and mismanagement.