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(Reuters) -Consumer lender Ally Financial has agreed to sell its credit card business to credit and payments firm CardWorks, the companies said on Wednesday.
Shares of Ally jumped 8.6% in premarket trading.
The sale comes as Ally looks to simplify and streamline its structure and focus on its core businesses.
The deal includes Ally's $2.3 billion in credit card receivables with 1.3 million active cardholders as of Dec. 31.
"This portfolio and platform acquisition is an exciting step in the expansion of our near-prime credit card business," said CardWorks CEO Dan Pillemer.
The deal is expected to close in 2025.
Last year, Ally sold its lending business to Synchrony Financial, which included loan receivables worth $2.2 billion.
J.P. Morgan Securities and Sullivan & Cromwell advised Ally on the deal, while CardWorks consulted with Cravath and Swaine & Moore.
(Reporting by Prakhar Srivastava in Bengaluru; Editing by Anil D'Silva and Vijay Kishore)