American Express to Sell Half of Global Business Travel Division
Sep 26th 2013 9:49AM
Updated Sep 26th 2013 9:50AM
American Express yesterday announced plans to divest half of its Global Business Travel (GBT) division.
The company is currently in discussions with an investor group directed by Certares International Bank, over a potential joint venture. The Certares-led group is expected to invest between $700 million and $1 billion for efforts in growing American Express' travel group, according to the company.
Under the terms of this situation, American Express would hold 50% of a stake in GBT, and this ownership would allow the travel division to continue operating under its American Express Global Business Travel name. Additionally, upon the close of this deal GBT's current employees are expected to move to a new business structure, managed by a board of directors.
According to Stephen J. Squeri, American Express' Group President of Global Corporate Services, selling half of the GBT is a sign of "strong progress in our efforts to transform our corporate travel 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."
American Express said that its consumer-travel business would not be included in the deal. The credit card company announced a restructuring plan in January that called for cutting 5,400 jobs, mostly in travel services. While its card holders have been charging more, the business-travel segment has been squeezed as companies ask employees to make travel arrangements online.
American Express has seen its price per share rise 32% since the start of 2013, from $57.48 to $76.44. The company has also seen annual revenue go up from $28.3 billion in 2008 to $31.5 billion last year, an 11% increase.
-- Material from The Associated Press was used in this report.
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