American Express plans to sell a 50% stake in its business-travel division in a bid to expand the operation.
Amex plans to partner with an investor group led by Certares, an investment firm headed by managers with experience in the travel industry, to expand its Global Business Travel operation. The joint venture will aim to offer new products and services through Global Business Travel, attract new customers and grow internationally, Amex says.
The investor group would invest between $700 million and $1 billion, and would receive a 50% ownership stake in the Global Business Travel division, with Amex retaining a 50% stake. The two companies expect the agreement close in the second quarter of 2014, pending regulatory and other approvals.
The Global Business Travel business would have a board composed of representatives appointed by both Amex and the investor group. The companies expect the business units current management to remain in place through the close of the deal.
The venture represents a continuation of Amexs efforts to transform its corporate-travel business, said Stephen Squeri, Amexs group president for global corporate services.
We anticipate that the expansion of our business travel offerings will not only help us grow [Global Business Travel], but it would also provide additional value to our corporate payments customers, which would help us accelerate growth in that business as well, Squeri says in a Sept. 25 news release. We believe this structure will provide superior opportunities for delivering customer benefits, retaining world-class talent and achieving long-term success.
Earlier this month, Amex announced that it would sell its publishing business to Time Inc. to comply with federal regulations.