Sears completes sale of credit & financial services operations to JPMorgan Chase Bank
16 Nov '05
4 min read
Sears Canada Inc announced the completion of the sale of the Company's Credit and Financial Services operations to JPMorgan Chase Bank, N.A., a wholly-owned subsidiary of JPMorgan Chase & Co, for CAD$2.3 billion in cash net of securitized receivables and other related costs and taxes.
An after-tax gain of approximately CAD$650 million has been recorded from the sale and will be accounted for in the fourth quarter.
As previously announced, the Company proposes to distribute to its shareholders approximately CAD$2.0 billion from the net after-tax proceeds by way of a reduction of the stated capital in the amount of approximately CAD$470 million and an extraordinary cash dividend in the amount of approximately CAD$1.530 billion.
The exact amount and timing of the distribution will be determined by the Board of Directors after the Special Meeting of Shareholders scheduled for December 2, 2005 and subject to the arrangement of a satisfactory operating credit facility.
As part of the transaction, Sears Canada and JPMorgan Chase have entered into a long-term marketing and servicing alliance with an initial term of 10 years during which Sears Canada will receive annual performance payments from JPMorgan Chase generated through credit sales, the opening of new accounts and sales of financial products.
There will be no change in the manner in which Sears customers currently use the Sears Card or Sears MasterCard. Both credit cards will continue to be offered through JPMorgan Chase and the transition will be seamless to Sears customers.
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