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American Express on Monday launched a joint venture with an investor group that includes Qatar’s sovereign wealth fund, selling off 50 per cent of its business travel unit in the deal.
Under the 900-million-dollar agreement, the Certares International Bank-led investor group will share ownership with American Express in its Global Business Travel division.
The deal is subject to approval by regulatory authorities, and American Express said it hopes to close the transaction later this year.
In addition to the Qatar Investment Authority, as the sovereign wealth fund is known, the other investors include the US-based Certares and BlackRock Inc, and Australia’s MacQuarie Capital.
American Express emphasised in its announcement in New York that its consumer travel business for ordinary travellers and card holders is not part of the transaction. The new unit will continue using the American Express brand.
In Doha, Ahmad Al-Sayed, chief executive officer of Qatar’s sovereign wealth fund, said his group was “pleased” with the terms and looked forward to being part of “a truly global operation.” The transaction takes place amid a travel market that has radically changed through the internet. American Express said it planned to use a “substantial portion” of the proceeds to invest in growth initiatives.
American Express business travel unit and its 14,000 employees are active in 139 countries and handle about $19 billion of trade a year.
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