AXP gives consent to sell-off Costco Wholesale Corp. to Citibank

AXP gives consent to sell-off Costco Wholesale Corp. to Citibank


Well reputed American Express Co. (AXP) is looking forward to gain approx. US$ 1.0 billion by selling off its U.S. co-branded card portfolio, Costco Wholesale Corp. to Citibank N.A.C.

INSIGHT: Last February, American Express announced the end of the exclusive cobranding agreement on grounds that it couldn’t find a deal that made better economic sense. The end of the deal was slated for this March.

The sale might prolong till June this year – a time needed to transfer all eligible Costco American Express Card accounts to Citi.

The American Express does not merely count on the defined gain saying that there could be some alteration within – keeping in view the time duration and difficult prediction of borrow and payment trends.

Moreover, a press release found on BusinessWire reads as:

“American Express undertakes no obligation to update or revise any forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include, but are not limited to, operational issues related to the transfer of Card Member loans and accounts, the parties’ ability to satisfy the closing conditions and the amount of any gain we recognize as a result of a sale, which could be impacted by the credit quality and performance of the portfolio, the amount of any volume decline experienced by the co-brand portfolio and the timing of the potential sale as the gain will be determined by the amount of the aggregate outstanding loans transferred at closing.”

UPDATE: The loss of the exclusive deal with Costco was seen as a huge blow to American Express, which also recently lost an agreement with JetBlue and faced an antitrust lawsuit from the Department of Justice.

Previous articleU.S economic growth hikes with 1.0%
Next articleFluctuatingloss scale: What’s in fate for Tribune Media?
I handle much of news coverage for tech stocks, and occasionally cover companies in different sectors. In the past, I've written for other financial sites and published independent investment research, primarily on tech companies. I have a B.A. in Economics from Columbia University. I'm based out of San Diego, but grew up in Southern New Jersey. I play basketball and tennis in my spare time, am a long-time (and long-suffering) fan of Philadelphia's sports teams, and alternate daily between using an iPad Air, a Galaxy Note 3, and one or two Windows PCs.