American Express lays plans for new business travel joint venture

American Express would maintain a 50 percent ownership of joint venture, which would still operate under the American Express Global Business Travel brand

September 25, 2013
by PurchasingB2B Staff

NEW YORK—American Express plans to create a joint venture to speed up transformation of its Global Business Travel (GBT) division. Through the proposal, the company said it would share ownership of the joint venture with an investor group led by Certares. It is expected that GBT’s operations, business relationships and other assets would be held and operated by the joint venture entity.

The joint venture transaction 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.

American Express would maintain a 50 percent ownership stake in the joint venture, the company said, which would continue to operate under the American Express Global Business Travel brand, while an investor group led by Certares would own the remaining 50 percent. The investor group would invest a sum in the range of $700 million to $1 billion, which would be used by the joint venture to grow the GBT business. Subject to the execution of definitive agreements and receipt of requisite regulatory and other approvals, the transaction would be expected to close in the second quarter of 2014, when American Express would to recognize a gain.

GBT employees would transition to the new structure and be managed by a board of directors, including representatives appointed by American Express and the investor group, as well as selected independent directors. The new joint venture would be positioned to utilize its own funds to invest in the business while still maintaining and benefitting from the customer benefits of a link to American Express’ 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.