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American Express is officially selling its massive Costco business to Citi
(Thomson Reuters)
American Express is selling its exclusive Costco portfolio to Citi.
Last February, American Express announced the end of the exclusive cobranding agreement on grounds that it couldn't find a deal that made better economic sense. The end of the deal was slated for this March.
For over a decade, shoppers could use only American Express credit cards at Costco.
In a statement Monday, American Express confirmed that it had sold the portfolio to Citi. The sale is expected to close in June, and all Costco customers with cobranded American Express cards will be transferred to Citi.
American Express could earn up to $1 billion from the sale, according to the statement.
The loss of the exclusive deal with Costco was seen as a huge blow to American Express, which also recently lost an agreement with JetBlue and faced an antitrust lawsuit from the Department of Justice.
And in a CNBC interview Monday, Warren Buffett, the company's largest shareholder, said the loss of Costco was a "big deal."
He talked about American Express after a viewer question that wondered why Berkshire Hathaway was still invested in the company even after all its recent issues.
Buffett said it was a very strong brand with a great reputation that would continue to face lots of competition.
American Express shares were up about 1% in morning trading as the broader market also rallied.
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