Wed, Mar 19, 2014 - Page 15 News List

Amex to sell half of travel business for US$900m sum


American Express (Amex) Co agreed to sell a 50 percent stake in its business-travel division for US$900 million as it seeks to boost revenue from corporate bookings.

Amex will create a joint venture with an investor group formed by Certares International Bank LLC that includes Qatar Holding LLC and funds managed by BlackRock Inc and Macquarie Capital, according to a statement on Monday from Amex and the Qatari fund.

The business will use the American Express brand and be headed by Bill Glenn, formerly the New York-based firm’s president of global commercial services. The consumer-travel operation is not part of the deal.

Amex, the biggest credit-card issuer by purchases, faces a slowdown in travel revenue as customers rely more on digital technology for bookings. Travel commissions and fees — including consumer and business sales — declined about 2.9 percent since 2011 to US$1.9 billion at the end of last year. Amex said in September last year that it was considering creating the joint venture in a deal valued at US$700 million to US$1 billion.

“There’s not a joint venture in the travel industry that could raise this kind of capital,” Glenn, who is now chief executive officer of global business travel, said in a telephone interview. “If we’re focused on delivering value to our customers and our suppliers and our partners using the capital infusion to invest in technology and information and our global footprint, we’ll be very, very successful.”

Among the investors, Qatar Holding will have the largest stake, followed by funds managed by BlackRock, said a person with direct knowledge of the matter who asked not to be identified because the talks are private. Amex said it gets a 50 percent ownership stake in the joint venture, and the others hold the remaining half in exchange for the US$900 million investment.

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