NEW YORK, March 17 American Express Co
said on Monday that four financial investors have committed a
total of $900 million to a business travel joint venture, in
what would be the largest single investment ever made in a
travel management company.
The deal highlights some of the challenges facing the
world's biggest credit card issuer, as tighter corporate budgets
weigh on its business travel division, which helps employees of
companies with their travel arrangements.
Certares LP, the investment firm founded by former JPMorgan
Chase & Co dealmaker and private equity veteran Greg
O'Hara, will be joined by Qatar Investment Authority, BlackRock
Inc and Macquarie Capital in the joint venture.
Qatar Investment Authority will have a bigger stake in the
joint venture than the other three investors, according to a
person familiar with the matter who was not authorized to
publicly disclose this detail. The deal underscores the
sovereign wealth fund's new appetite for private equity-type
direct investments in U.S.-based companies.
American Express said in September it was in talks to sell
half of its business travel division for up to $1 billion to an
investor group led by Certares. The company's consumer travel
business will not be a part of the deal.
On Monday, American Express said an agreement had been
reached and revealed the identity of those involved. It will own
half of the joint venture, with the four financial investors
owning the remainder, according to a statement by the company.
The New York-based company said it expected to use a
"substantial portion" of any gain recognized upon a closing of
the transaction, expected in the second quarter, to invest in
The travel business unit is the biggest of its kind, serving
customers who collectively spend more than $19 billion in
corporate travel. It is present in 139 countries and employs
over 14,000 people.
Former American Express global commercial services president
Bill Glenn will be chief executive of the joint venture, while
O' Hara will serve as chairman, the companies said. O'Hara also
sits on the board of directors of Travel Leaders Group, the
largest U.S. travel agency company.
UBS AG and Lazard Ltd advised American
Express, while Credit Suisse Group AG advised the
Certares-led investment group on the deal.