In an interesting move, Citi has agreed to sell Diners Club International to Discover for $165 million.
Looked at objectively it is not an altogether surprising move. Citi has become very unwieldy and inefficient and the ownership of Diners Club wasn’t really improving competitiveness in any way.
Vikram Pandit, the new Chief Executive has been brought in specifically to cut the fat and this follows on from the recent loss of 4000 jobs in Citi worldwide, with suggestions for a second round that is likely to focus around middle management with a possible 25,000 losing their jobs worldwide. This severs a 27 year link up Citi has had with Diners Club.
Citi will now be able to focus on their card issuing business around the world according to Ed Eger, the Head of International Cards.
It will make sense from a Discover point of view as well as it will increase their network, which can be quite limited. The integration will allow Discover cardholders to use their cards at merchants that accept Diners Club cards around the world. At the same time Diners Club customers will be to use their plastic on the Discover Network in North America.
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1 comments:
Well written article.
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