US financial institution Capital One has completed the acquisition of banking and financial services organisation HSBC Card. The company has first revealed plans to acquire HSBC Card in August 2011.
Under the terms of the agreement, Capital One paid USD 31.3 billion in cash to HSBC, including a USD 2.5 billion premium on the credit-card loans. According to Capital One, cited by media outlet smartmoney.com, the deal includes USD 28.2 billion of credit-card loans and USD 600 million in other net assets.
In March 2012, Capital One has unveiled that it is selling USD 1.25 billion of common stock to help fund the acquisition. The acquired portfolio includes a large portion of private-label cards.
In addition to the current acquisition, Capital One has also entered an agreement with a technology unit of HSBC which will provide its services related to fraud and information security, business intelligence and other activities for up to two years.
The HSBC deal is the second acquisition completed in 2012 by Capital One, which has also closed its purchase of ING US online banking business in February 2012.
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