HSBC buys U.S. Metris

HSBC, the UK-based banking giant, said Thursday it agreed to buy American credit card firm Metris for $1.59 billion to expand further into the US credit card industry.

Common shareholders of Metris will receive about $911.1 million, or about $15 per share, the two companies said Thursday in a joint statement.

HSBC also will pay $682.6 million to buy out the preferred stock in Metris held by Thomas H. Lee Partners LP, a private-equity firm, Xinhua reports.

The purchase is the third of a large U.S. credit card company in recent months, after Bank of America's $35 billion purchase of MBNA, and Washington Mutual's takeover of Providian Financial for $6.45 billion.

HSBC Finance is the sixth-largest U.S. issuer of MasterCard and Visa cards, while Metris is the 11th biggest.

The Metris purchase will increase the size of the London-based bank's credit-card business in the U.S. by almost a third.

The purchase is expected to close in the fourth quarter, subject to shareholder and regulatory approval and resolution of a possible US Securities and Exchange Commission enforcement action over Metris' accounting in 2001 for loan losses.