News & Events

Simpson Thacher is representing Federated Department Stores in its announced sale of approximately $6.6 billion of credit card assets to Citibank. Citibank will pay an 11.5% premium for Federated's credit card portfolios and the credit card portfolios of The May Department Stores Company ("May"). As part of the transaction, Federated and Citibank have entered into a multi-year strategic alliance to operate Federated's proprietary and co-branded Visa credit card businesses.

At the initial closing, Federated will sell certain proprietary credit card and Visa credit card receivables (which totaled approximately $3.2 billion at fiscal year end 2004) to Citibank. At the second closing, which is expected to occur in April 2006, Federated will sell the credit card receivables generated in its retail operations that are currently owned by General Electric Capital Corporation (GECC) (which totaled approximately $1.2 billion at fiscal year end 2004) to Citibank after repurchasing such receivables from GECC. At the third closing, which is expected to occur within one year following the successful completion of Federated's pending acquisition of May, Federated will sell the approximately $2.2 billion of May credit card receivables to Citibank. The transaction is subject to regulatory approvals and other customary closing conditions.

Federated is one of the nation's leading department store retailers. Federated operates more than 450 stores in 34 states, Guam and Puerto Rico under the names of Macy's and Bloomingdale's. Federated also operates macys.com and Bloomingdale's By Mail.

The Simpson Thacher team includes Lee Meyerson, Maripat Alpuche, Jason Cohen and Jennifer Nadborny (M&A), Gary Rice (Bank Regulatory), and Charlie Rappaport and Audra Lazarus (Tax).