American Express is selling American Express Bank, which controls its international banking operations, to London-based financial holding company Standard Chartered PLC for about $1.1 billion, it said Tuesday. The price includes the closing NAV of AmEx Bank, plus $300 million. According to AmEx CEO Kenneth I. Chenault, the sale "reflects our strategic focus on the high-growth, high-return payments businesses that have been driving our performance in recent years." The deal will likely close in the first quarter and will not affect the company's credit card business. The deal gives Standard an additional $22.5 billion in assets under management, with expected synergies of $100 million a year starting in 2009. AmEx doesn't expect to the sale to impact its own earnings negatively. AmEx shares are down 4% in 2007 and are flat in early Tuesday trading.
Sources: Press Release, Wall Street Journal, Reuters, AP, MarketWatch
Commentary: American Express: Don't Leave Home Without It • Credit-Card Defaults on the Rise -- FT • American Express Q2 Profit Rises 12%, But Shares Fall
Stocks/ETFs to watch: AXP. Competitors: MA
Earnings call transcript: American Express Q2 2007
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