AmEx in talks to sell 50% of travel unit to investor group
26 September 2013
American Express Co (AmEx) yesterday said that it is in talks with an investor group led by Certares to create a joint venture to run its Global Business Travel (GBT) division.
As part of the proposed JV, AmEx expects GBT's operations, business relationships and other assets to be held and operated by the JV entity.
The JV is expected to create greater investment capacity for GBT to further enhance its suite of products and services, attract new customers and grow internationally to deliver additional value to customers.
AmEx would maintain a 50-per cent stake in the JV, which would continue to operate under the American Express Global Business Travel brand, while the investor group led by Certares would own the remaining 50 per cent.
The investor group would invest between $700 million to $1 billion, which would be used by the JV to grow the GBT business.
GBT employees would be transferred to the new JV entity which, upon closing, would be managed by a board of directors that would include representatives appointed by AmEx and the investor group, as well as selected independent directors.
Travel has been an integral part of AmEx for more than one hundred years, and maintaining a strong presence in the business travel industry is of strategic value to the company,'' AmEx said.
''We've been making strong progress in our efforts to transform our corporate travel business. The first phase of this transformation, announced earlier this year, has been focused on reducing the cost structure within GBT through our technology and infrastructure advances,'' said, Stephen Squeri, group president, Global Corporate Services at AmEx.
GBT has operations and network partners in 138 countries and offers a network and service to customers representing more than $19 billion in corporate travel spend.
The new joint venture would benefit to a link to AmEx other business units, such as Global Corporate Payments, which issues the American Express Corporate Card and provides business-to-business payment solutions.
American Express' consumer travel business, which provides Card Members and other consumers with travel benefits and services, would not be part of the proposed transaction.