NEW YORK — American Express is looking to accelerate the transformation of its Global Business Travel (GBT) division with a new billion-dollar joint venture.
The plan is for Amex to sell half of GBT to an investor group led by New York-based Certares International Bank, and in turn the investor group will invest between $700 million and $1 billion into the division. The deal 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, says Amex.
Amex will maintain a 50% ownership stake in the venture, which would continue to operate under the American Express Global Business Travel brand. The transaction is expected to close in the second quarter of 2014.
“We’ve been making strong progress in our efforts to transform our corporate travel business,” said Stephen J. Squeri, Group President, Global Corporate Services, American Express. “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. 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.
“We anticipate that the expansion of our business travel offerings will not only help us grow GBT, but it would also provide additional value to our corporate payments customers, which would help us accelerate growth in that business as well. We believe this structure will provide superior opportunities for delivering customer benefits, retaining world-class talent and achieving long-term success,” he said.
GBT has operations and network partners in 138 countries worldwide and its customers represent more than $19 billion in corporate travel spend.