As part of the deal, the financial services company paid Sears about $3.2 billion. Some $2.9 billion of that amount came from a 10% premium for the $28.6 billion in receivables Sears held on its private label and bank card portfolios. Citigroup also paid Sears about $300 million for business facilities, employees and other assets related to the retailer's credit card business.
Sears and Citigroup
announced an agreement in July. Sears had been
shopping around its credit card portfolio for several months.
The credit card business has been more profitable for Sears than its core retail division. However, the financial services arm has been plagued by rising default rates and bad debt. The company's stock took a hit over the last year after the company took a $300 million pretax charge last year related to recalculating its provision for uncollectible accounts.
Following the announcement that the deal was completed, Sears shares closed regular trading up 62 cents, or 1.2%, to $53.25. Citigroup shares ended regular trading up 64 cents, or 1.4%, to $48.04.