Mumbai: Diversified global financial services company American Express Co will acquire Corporate Payment Services, a commercial credit card and corporate purchasing business of GE Money, from General Electric Co for $1.1 billion.
The acquisition is expected to close by the end of the month.
GE Money's corporate payment service caters to more than 300 ''premium'' corporate clients, including Sprint Nextel Corporation and online travel company Travelocity.com Inc, Anre Williams, president of Amex's Global Commercial Card and Services business, said in a statement.
GE Money, General Electric Co's London-based consumer and small business financial services unit, has more than $200 billion in assets and 130 million customers in 50 countries.
GE Money's Corporate Payment Services handled $14 billion transactions, including travel and entertainment expenses, for its corporate clients in 2007, the statement added.
GE has also agreed to remain a client after the business is transferred to American Express, Williams said.
American Express is financing the acquisition out of its cash holdings, which were over $17 billion as of February 29.
While the acquisition will cut into the return on equity of American Express for years to come, it makes strategic sense for Amex, which is looking to reduce dependence on consumer credit and bolster its corporate payments business.
UBS AG advised American Express in the transaction and Goldman Sachs Group Inc. represented General Electric.
General Electric is also divesting the businesses in Europe in an asset swap with Banco Santander SA, Spain's largest bank. GE will get Italian lender Interbanca in the transaction, valued at 1 billion euros ($1.58 billion). Santander will take over GE Money's units in Germany, Austria and Finland and credit-card and auto-finance divisions in the UK.