Citi Reaches Deal for American Express’s Costco Credit Card Portfolio 

Costco

Deal comes after AmEx and Costco said last year they were ending their 16-year relationship

Citigroup Inc. reached a deal to buy Costco Wholesale Corp.’s co-branded credit-card portfolio from American Express Co.

Financial terms weren’t provided in Monday’s news release. The sale is expected to close in June, at which time all eligible Costco American Express Card accounts will be transferred to Citi.

The deal comes after American Express and Costco said last year that they were ending their 16-year relationship, which had driven a significant amount of business to the New York credit-card company. The failure to agree on new terms was a fresh blow to AmEx, which was already falling short of some sales targets.

Citi and Visa Inc. previously won the sought-after credit-card contract for Costco, a move that will significantly expand the kind of plastic that is accepted at the warehouse giant.

Citi said it expects to begin issuing Costco credit cards when the deal closes, and it doesn’t expect the deal to have a material effect on its 2016 earnings.

American Express, for its part, has said it expects to book a gain of about $1 billion on the sale.

Source: WSJ

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