American Express is in “ongoing discussions” with an investment firm to spin off its business travel division into a separate company.
Amex announced that it was talking to New York-based investment company Certares about creating a joint venture for Amex’s Global Business Travel (GBT) division. This would see a group of investors led by Certares injecting between $700 million and $1 billion into the TMC.
“It is expected that GBT’s operations, business relationships and other assets would be held and operated by the joint venture entity,” said Amex in a statement.
“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 added that it was planning to hold a 50 per cent stake in the proposed joint venture, which would continue operating under its current American Express Global Business Travel brand. Certares will own the other 50 per cent of the new company.
If agreement can be reached between the two companies the transaction could be completed in the second quarter of 2014, subject to getting any necessary regulatory approvals.
Amex’s business travel staff will be moved across to the new company which will be managed by a board of directors appointed by Amex and Certares, alongside some independent directors.
Stephen Squeri, Amex’s group president, global corporate services, said: “We’ve been making strong progress in our efforts to transform our corporate travel business.
“The joint venture we plan to form represents the next phase of the transformation, which is aimed at accelerating the growth of this business through additional investments that would be used to develop new products, services and capabilities that we expect will help us meet the evolving needs of our current customers, attract new ones, and continue to build our international business.”