For the past couple days, I was at the Card Forum & Expo in Miami. There was a lot of buzz about debit cards, alternative payments – such as BillMeLater.com and Revolution Money – as well as mobile applications.
But there was also lots of talk about the recent buyout deal -- Discover Financial Services (NYSE: DFS) agreed to purchase the Diners Club International network from Citigroup (NYSE: C). The price tag came to $165 million.
Actually, Diners Club is a pioneer, having created the first major platform for charge cards (back in 1950).
No doubt, it was mainly for the affluent, and in the world of credit cards, Diners looks more like a niche player. So why the interest from Discover?
Basically, it's a way to move more aggressively into global markets as cards from Diners are accepted in more than 185 countries.
According to Discover, the deal is expected to add $10 million to $15 million in annual pre-tax profits – which is certainly good news. So, in yesterday's trading, Discover's stock price was up 5.5% to $18.09.
Tom Taulli is the author of various books, including The Complete M&A Handbook
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