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Banks

U.S. clears Intuit's $7 billion deal for Credit Karma after divestiture

FILE PHOTO: An Intuit office is shown in San Diego, California August 21, 2015. REUTERS/Mike Blake/File Photo

WASHINGTON (Reuters) - The U.S. Justice Department said on Wednesday that Intuit Inc can complete its purchase of personal finance portal Credit Karma for $7.1 billion as long as Credit Karma sells its tax business.

In February Intuit said it would buy privately held Credit Karma in a cash-and-stock deal, as the TurboTax maker seeks to expand further into consumer finance.

The deal hands Intuit access to Credit Karma’s trove of financial data on its 35 million customers.

The Justice Department said in a statement that without the divestiture, the deal would hurt competition for digital do-it-yourself tax preparation products.

The Justice Department said Square Inc will buy Credit Karma Tax, the fifth-largest provider of online tax preparation products for U.S. federal and state tax returns.

Shares of Intuit rose 1.4 percent while shares of Square were up 3.5 percent.

Reporting by Susan Heavey and Chris Sanders; Editing by Chizu Nomiyama and Jonathan Oatis

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