American Express OKs Spinoff of Advisory Unit

American Express Co., the fourth-largest U.S. credit card issuer, approved the spinoff of its 12,000-broker financial advisory unit, the company said Wednesday.

American Express Chief Executive Kenneth Chenault had said in February that he planned to shed the slower-growing financial advisory unit to compete better against MasterCard and Visa International

The American Express board voted to proceed with the spinoff, the New York-based company said.

Shares of the unit, Ameriprise Financial Inc., formerly known as American Express Financial Corp., will be distributed to American Express shareholders of record as of the close of business Sept. 19. They will get one share of Ameriprise for every five they hold in American Express.

The transaction won’t add to tax bills of shareholders or the company, according to a ruling from the Internal Revenue Service cited by American Express.

The spinoff will be worth $8 to $9 a share to American Express shareholders, Chris Brendler, a financial services analyst with Legg Mason Inc., wrote in a June report. Legg Mason has a “hold” recommendation on American Express.

American Express shares fell 56 cents to $55.44 on Wednesday. Ameriprise stock will trade on the New York Stock Exchange under the symbol AMP.