Post by Moses on Jun 13, 2005 18:48:43 GMT -5
HSBC buys US card business
June 10, 2005
HSBC Holdings, Europe's biggest bank by market value, has agreed to buy Neiman Marcus Group's store credit-card business for US$640 million (HK$4.992 billion) as it tries to speed growth in the biggest consumer credit market.
HSBC will pay the Dallas-based luxury retailer, which is being acquired by two private equity firms, about US$527 million in cash and assume or repay about US$113 million of its liabilities, said the two firms Thursday.
HSBC will gain more than three million customer accounts from Neiman Marcus and its Bergdorf Goodman unit.
HSBC is expanding its credit card and consumer finance business in the United States after spending US$15 billion to buy Household International in 2003. That deal made it the No2 US provider of loans to people with weak credit records, adding more than 50 million clients in the country.
``Acquiring a small card business makes a lot of sense,'' said WestLB Equity Markets analyst James Hamilton in London, who has a ``sell'' rating on the stock. ``It's likely that the Household platform is more efficient and that they won't need the IT infrastructure of the firm they're buying, so there may be some cost savings.''
The purchase is HSBC's second of a store-card unit in the past six months.
In November, it paid 762 million (HK$10.9 billion) for Marks & Spencer's consumer banking unit, adding 2.7 million customers.
Other US retailers have also been selling their credit-card businesses to invest the proceeds in retail operations. Federated Department Stores announced its sale to Citigroup last week.
Texas Pacific Group and Warburg Pincus expect to complete their acquisition of Neiman Marcus for US$5.1 billion by November 1.
Copyright 2005, The Standard, Sing Tao Newspaper Group and Global China Group. All rights reserved. No content may be redistributed or republished, either electronically or in print, without express written consent of The Standard.
June 10, 2005
HSBC Holdings, Europe's biggest bank by market value, has agreed to buy Neiman Marcus Group's store credit-card business for US$640 million (HK$4.992 billion) as it tries to speed growth in the biggest consumer credit market.
HSBC will pay the Dallas-based luxury retailer, which is being acquired by two private equity firms, about US$527 million in cash and assume or repay about US$113 million of its liabilities, said the two firms Thursday.
HSBC will gain more than three million customer accounts from Neiman Marcus and its Bergdorf Goodman unit.
HSBC is expanding its credit card and consumer finance business in the United States after spending US$15 billion to buy Household International in 2003. That deal made it the No2 US provider of loans to people with weak credit records, adding more than 50 million clients in the country.
``Acquiring a small card business makes a lot of sense,'' said WestLB Equity Markets analyst James Hamilton in London, who has a ``sell'' rating on the stock. ``It's likely that the Household platform is more efficient and that they won't need the IT infrastructure of the firm they're buying, so there may be some cost savings.''
The purchase is HSBC's second of a store-card unit in the past six months.
In November, it paid 762 million (HK$10.9 billion) for Marks & Spencer's consumer banking unit, adding 2.7 million customers.
Other US retailers have also been selling their credit-card businesses to invest the proceeds in retail operations. Federated Department Stores announced its sale to Citigroup last week.
Texas Pacific Group and Warburg Pincus expect to complete their acquisition of Neiman Marcus for US$5.1 billion by November 1.
Copyright 2005, The Standard, Sing Tao Newspaper Group and Global China Group. All rights reserved. No content may be redistributed or republished, either electronically or in print, without express written consent of The Standard.