Citigroup Inc., the world's biggest credit card issuer, said Tuesday that it had agreed to buy the rest of Diners Club Europe that it did not already own from the Milan fashion company GTP Holding SpA.
Citigroup currently has an 11.5% stake in Diners Club Europe. The purchase would give it the Diners Club businesses in the United Kingdom, Ireland, Belgium, Luxembourg, the Netherlands, Italy, France, Germany, and Switzerland.
The price was not disclosed.
Citigroup recently reaffirmed its intention to enlarge its market share in consumer banking and consumer cards across Europe, the Middle East, and Africa. It owns the Diners Club International franchisor, which has a stake or full ownership of card franchises in 26 countries, and wholly or partly owns Diners Club businesses in 18 countries. It also has an established cards base in Europe and said it believes that the Diners Club Europe franchises will complement its existing product offering, providing a boost to its longer-term growth strategy.
On July 15 it agreed to buy Sears, Roebuck and Co.'s credit card portfolio for about $3 billion in cash to expand in the United States.
Citigroup earned $768 million from credit cards in the second quarter, 6% more than a year earlier, and had $125.5 billion in credit card balances outstanding in 99.2 million accounts.
GTP said in the announcement that it is selling to focus on its IT Holding SpA, which owns the Gianfranco Ferre fashion house.
Diners Club has about eight million cardholders and $30 billion of annual charge volume. Citigroup spokeswoman Susan Tether said it does not disclose the loans outstanding or the number of cardholders in Diners Club Europe.
