Goldman Sachs will spend $ 2.5 billion “swallow” credit card business of General Motors
The Wall Street Journal reported on October 1 that the multinational investment bank Goldman Sachs Group Inc is buying the credit card business of General Motors Co (GM) for about $ 2.5 billion.
According to the source, Goldman Sachs has “overtaken” Barclays Plc to win this deal.
Credit card issuers Capital One Financial Corp of GM and Goldman Sachs have reached consensus on the value of the deal and is expected to be completed in the next few weeks.
The deal is expected to help Goldman Sachs focus more on retail banking, to compensate for affected business areas such as financial transactions and investment banking.
Goldman Sachs’ current presence in the retail banking sector is quite low, unlike other “big peers” like JPMorgan Chase & Co and Citigroup Inc.
Goldman Sachs CEO David Solomon is also trying to find ways to strengthen Goldman Sachs’ operations in the retail banking sector.
Capital One Financial Corp will be Goldman Sachs’ second largest credit card partner, after partnering with technology company Apple Inc to issue credit cards in 2019. The deal also comes at a time of households. American families are cutting back on their spending in response to the epidemic of acute respiratory infections COVID-19.
Goldman Sachs and GM both declined to comment on the deal.