Synchrony and Walmart settle lawsuit
STAMFORD — Walmart is dropping its lawsuit against consumer financial-services firm Synchrony, while the latter also said Wednesday it would sell the loan portfolio that it manages for the country’s largest brick-and-mortar retailer and continue a longstanding agreement with the Walmart-owned Sam’s Club chain.
The retailing giant’s move resolves a complaint filed last November alleging that Synchrony had breached their agreement, following its decision last July to end the Stamford company’s two-decade run as its credit-card provider in favor of a new deal with Capital One. But the companies are maintaining their ties by extending a separate, 25-year partnership that provides co-branded and private-label credit card programs to Sam’s Club members.
“We’ve been able to renew Sam’s (Club), resolve where the Walmart (loan) book is going and not have the lawsuit hanging over our head,” Synchrony CEO and President Margaret Keane said on an earnings call Wednesday. “The overall result of where we ended is really great for the company.”
At the same time, Synchrony confirmed that it would sell to Capital One its Walmart loans, which are expected to be worth about $9 billion when they are transferred in the third or fourth quarter of this year. Capital One is set to become later this year the exclusive issuer of Walmart’s private label and co-branded credit card program.