Reflections on Household/Beneficial Merger

In the latest issue of Specialty Lender, E. B. Easter reveals the expectations and outcomes of the merger of Household International Inc. and Beneficial Corp. that was announced in April 1998. The acquisition was completed in June 1999, when Household paid $9.0 billion for Beneficial. When Associates First Capital was subsequently acquired by Citigroup, Household became the largest independent finance company in the US.

The accompanying table shows that Household brought to the table a strong presence in credit cards. Of its total managed receivables, 40 percent was in Visa/MasterCard receivables and 13 percent in private-label credit cards. Beneficial had a stronger presence in real estate loans. In 2000, Household had only five percent of its assets in automobile loans, which are included in the "other" category.

* June 30, 1998 pro forma statements.
** 1st quarter, 2000.