Summary
American Express Company (AXP) announced on August 1, 2005, that it has entered into a definitive agreement to sell its American Express Tax and Business Services Inc. subsidiary to H&R Block Inc. for approximately $220 million. This divestiture is a strategic move to streamline operations and focus on core business areas. The transaction is anticipated to close by September 30, 2005, pending customary closing conditions, including regulatory approval under the Hart-Scott-Rodino Act. Investors should note that the company does not expect the gain from this sale to materially impact its third-quarter financial results. This is largely due to unrelated costs stemming from ongoing global re-engineering initiatives. Furthermore, the sale is not projected to have a significant effect on American Express's ongoing earnings, suggesting that the tax and business services division was not a major contributor to its core profitability.
Key Highlights
- 1American Express Co. to sell its Tax and Business Services Inc. subsidiary to H&R Block Inc.
- 2Agreed-upon purchase price is approximately $220 million.
- 3The transaction is expected to be completed by September 30, 2005.
- 4The sale is subject to pre-acquisition clearance under the Hart-Scott-Rodino Act.
- 5The company does not anticipate a material impact on third-quarter results due to unrelated re-engineering costs.
- 6The sale is not expected to materially affect American Express's ongoing earnings.