Sears, Roebuck & Co is to sell its credit-card operations to Citigroup Inc for $3.4 billion in cash.

In a statement, Sears said the sale of its Credit and Financial Products business will also free up $3 billion in invested capital for the company.

As part of the transaction, Sears and Citigroup will also enter into a long-term marketing and servicing alliance with an initial term of 10 years.

With 25 million active accounts out of a total of 59 million accounts, Sears' credit-card portfolio is the eighth-largest in the US. But the credit-card unit has been hurt badly by rising delinquencies and Sears announced earlier this year that it wanted to sell the unit in order to focus on its retail operations.