Wesfarmers has exercised a call option to buy the remaining 50% shares in Wesfarmers Finance, the holding company for the Coles Credit Card Joint Venture, held by GE Capital Finance JV Holdco (GE).
The call option comes after GE’s announcement last month to sell its Australian consumer-lending operations.
The terms of the deal, which is expected to complete this financial year, were not disclosed. The joint venture will be managed by a team formerly employed by GE and Coles Financial Services.
The transaction will be funded initially from Wesfarmers’ existing corporate debt facilities, with other financing arrangements likely to be launched over time.
Wesfarmers Financial Services managing director Rob Scott said that the deal is expected to provide further scale and capability.
The acquisition will not materially affect Coles’ earnings over the next year. GE has been issuing credit cards under the Coles brand in Australia for more than 20 years.
“This will build on Coles’ growth in financial services which now services over 800,000 customers covering car, home and life insurance, credit cards and mobile wallet,” Scott said.
Coles Managing Director John Durkan said the acquisition will offer further flexibility in delivering compelling value in retail financial services to its customers.