BMO Financial Group said Tuesday that it will buy the Diners Club North American franchise from Citigroup Inc., more than doubling its corporate card business.
The move alleviates Citigroup of all Diners Club operations, as it sold of the company's international business to Discover Financial Services last year.
BMO said the deal will add $7.8 billion in card transactions and gives it net receivables of nearly $1 billion, making it more competitive in the North American commercial card market.
Further terms were not disclosed.
Citigroup said the sales will likely lower its assets in Citi Holdings by about $1 billion, but should not have a material impact on its net income or capital ratios.
The acquisition gives Toronto-based BMO exclusive rights to issue Diners Club cards to corporate and professional clients in the U.S. and Canada. It includes the Club Rewards program and the Diners Club professional card.
"The Diners Club North American franchise brings new card members to our company, provides attractive additional options for our existing customers and makes us an even more compelling choice in the market for prospective commercial customers in Canada and the United States," Frank Techar, president and CEO of personal and commercial banking at BMO Bank of Montreal, said in a statement.
Citigroup will support Diners Club operations until they fully transition to BMO.
The acquisition is expected to close before March 31, 2010.
In premarket trading, shares of Citigroup slipped 3 cents to $4.25.