American Express to create a joint venture for its corporate travel business
American Express Company has signed an agreement to create a joint venture to manage its Global Business Travel (GBT) division. Under the agreement, American Express will share 50/50 ownership with a group of investors led by Certares and Qatar Investment Authority.
American Express Company has signed a joint venture agreement to create a joint venture to manage its Global Business Travel (GBT) division.
American Express will contribute its GBT operations to a new holding company, which will include some of the assets and liabilities that currently comprise GBT, and will have a 50% stake after the closing of the transaction. In exchange for an investment of US$900 million in the joint venture, the investor group will control the remaining 50%.
The group formed by Certares includes Qatar Investment Authority through its wholly owned subsidiary Qatar Holding LLC, funds managed by Blackrock, Certares itself Certares and Macquarie Capital. The company will continue to operate under the American Express Global Business Travel brand name following the closing of the transaction.
American Express plans to enter into global agreements with the joint-venture to provide seamless service and close coordination, for the benefit of the common customers of GBT and other American Express business units, such as the Global Corporate Payments, which issues American Express Corporate Cards, and offers business-to-business payment solutions.
Bill Glenn, the former president of Global Commercial Services at American Express, will be CEO of the new company. Certares founder, Greg O’Hara, will be chairman of the board of directors.
The new company will use GBT's innovative technological solutions in online services, Premium services,;mobile applications, reporting management and itineraries, as well as customer service experience. In addition to travel services, GBT offers meeting and event management and consulting services to some of the world's most recognized companies.
Closing of the transaction is subject to obtaining the appropriate regulatory approvals and satisfaction of other customary closing conditions. Assuming these conditions are satisfied, American Express plans to close the transaction in the second quarter of 2014.
American Express Global Business Travel has more than 14,000 employees in 139 countries worldwide. Its customers account for more than 19 billion $19 billion in corporate travel spending.