American Express, Certares In $900 Mln. Deal For Business Travel JV - Update

(RTTNews) - Credit card service provider American Express Co. (AXP), Monday agreed with a Certares-led group to create a joint venture for its Global Business Travel unit that helps corporates in their travel plans.

The deal requires American Express to separate the operations of its Global Business Travel unit (GBT)into a dedicated holding structure. American Express will have a 50 percent stake in the GBT joint venture, while the Certares-led group will pay $900 million for its equal stake. American Express expects to close the deal in the second quarter of 2014.

Kenneth Chenault, chief executive of American Express said the deal reflects its continued commitment to the travel business through a new structure with a reputed group of investors and the resources to grow the business.

American Express in September revealed plans for such a deal, coming at a time when corporates seek ways to trim their travel budget.

The Certares-led group includes Qatar Investment Authority through its subsidiary Qatar Holding LLC, funds managed by BlackRock, Certares itself and Macquarie Capital.

American Express said the spun-off business will continue to operate under the brand name "American Express Global Business Travel" upon closing.

Bill Glenn, formerly president of Global Commercial Services at American Express, will be CEO of the GBT joint venture, while Certares founder Greg O'Hara will serve as its chairman.

GBT has over 14,000 employees and operations and network partners in 139 countries, offering a comprehensive network, service dependability, and insight to customers representing a huge part of the corporate travel spend.

The joint venture will build upon GBT's technology innovations to support digital and premium servicing capabilities, mobile applications, improved reporting tools and itinerary management solutions.

American Express said it plans to use a major part of any gain recognized from the deal to invest in growth initiatives.

American Express' consumer travel business, which provides Card Members and other consumers with travel benefits and services, is not part of the deal.

American Express stock closed Monday at $91.26, up $1.09 or 1.21%, on a volume of over 3 million shares.