Citigroup Inc. and department store operator Sears Holdings Corp. said May 21 that they have extended their co-brand and private label credit card partnership.
The extended arrangement will offer Shop Your Way Mastercard holders new benefits that previously were only available on a promotional basis, such as 5% back in points on eligible purchases made at gas stations, 3% back in points on eligible purchases at grocery stores and restaurants, 2% back in points on eligible purchases made at Sears and Kmart, and 1% back in points on all other eligible purchases.
As part of the deal Citi will pay Sears $425 million, of which $400 million has been paid.
The extension of the Citi-Sears agreement will remain substantially consistent with the existing agreement through Dec. 31, 2020, and will be performance-based thereafter. An amendment to the terms, however, removes Sears' right to purchase certain portfolio assets and remaining program assets previously included in the program. The retailer will have the right to purchase remaining program assets in certain circumstances, including at the end of another extension term, according to the release.
Goldman Sachs and Wachtell Lipton Rosen & Katz were Sears' advisers in the transaction, while Citi was advised by Davis Wright Tremaine LLP and Davis Polk & Wardwell.