Springleaf to Sell 127 Branches to Secure Approval for OneMain Deal
14 November 2015 - 4:00AM
Dow Jones News
Lender Springleaf Holdings Inc. said it has agreed to sell about
127 branches in order to secure approval for its acquisition of
Citigroup Inc.'s OneMain Financial business.
As part of the deal with the U.S. Department of Justice and
seven state attorneys general, Springleaf will sell the branches to
Lendmark Financial Services of Covington, Ga.
Springleaf said the branches represent 4% of the company's
receivables on a pro forma basis.
Springleaf shares added 6.6% in late morning trading, while
Citigroup shares were down about 0.9%.
Springleaf announced the $4.25 billion deal for OneMain in
March, a combination expected to create a U.S. subprime giant.
In August, the company said the Justice Department voiced
concerns about the deal, delaying its closing.
The deal had originally been scheduled to close by Sept. 30.
Springleaf said Friday that it expects to receive approval and
shortly, and it will close immediately after.
Getting rid of the OneMain unit has long been a goal for
Citigroup. The bank put the subprime lender on the chopping block
as early as 2009. In recent years, Citigroup has also jettisoned
well-known names like the Smith Barney brokerage unit and life
insurer Primerica as the firm tries to remake itself after the
financial crisis.
Big lenders have been caught between trying to satisfy banking
regulators who want them to shrink and antitrust regulators who
want to preserve choice in the marketplace, which often diminishes
with such deals. Citigroup's OneMain and Springleaf compete with
each other in some markets.
Write to Chelsey Dulaney at Chelsey.Dulaney@wsj.com
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(END) Dow Jones Newswires
November 13, 2015 11:45 ET (16:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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