US credit card firm Discover Financial Services has signed a deal to buy the Diners Club International card payments network from Citi in a deal worth $165 million.
Discover says the Diners Club network - which generates more than $30 billion per year at eight million locations in 185 countries outside the US - will increase global acceptance of its own cards.
"We expect this acquisition to significantly improve our competitive position by giving us global reach and accelerating growth in our payments network revenues," says David Nelms, CEO, Discover.
The US card firm says the Diners Club network will be fully integrated with its own card network over the next two to three years.
The integration will allow Discover cardholders to use their cards at merchants that accept Diners Club cards around the world. At the same time Diners Club customers will be to use their plastic on the Discover Network in North America.
The deal covers Diners Club's staff, brand, trademarks and agreements with 44 network licensees. However Diners Club licensees in North America and globally are not included in the acquisition. Also, assets and employees in France are not currently included in this transaction but Discover says this is expected to change "shortly".
Once the deal is completed, Discover says it will not issue cards or extend consumer credit in international markets.
The acquisition is expected to close within 90 days, subject to regulatory approvals and customary closing conditions.
Ed Eger, head, international cards, Citi, says the bank decided to sell in order to streamline operations and focus on its card issuing businesses around the world.
Citi will remain a "significant long-term issuer on the Diners Club network as part of the transaction", says Discover.