American Express (NYSE:AXP)
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6 Months : From Oct 2019 to Apr 2020
By AnnaMaria Andriotis
This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (December 18, 2019).
Private-equity firm Carlyle Group LP and others are taking a stake in American Express Global Business Travel, in an equity recapitalization deal that values the company at $5 billion, including debt, according to a person familiar with the matter.
The business confirmed the investment Tuesday after the deal and valuation were reported by The Wall Street Journal. New investors include Carlyle Global Partners, Singapore's sovereign-wealth fund GIC, the University of California Office of the Chief Investment Officer of the Regents and Kaiser Permanente.
AmEx Global Business Travel offers services mostly to large and midsize businesses that need to book airfare and hotel rooms.
The business was owned entirely by American Express Co. until 2014 when the card company sold off a 50% stake to a group of investors led by Certares LP that invested $900 million at the time. The investment was intended to improve the company's technology and increase its acquisitions in the travel and management space. AmEx wanted to make the unit more nimble as it faced increased competition from online travel-booking sites.
About a year ago, AmEx informed the Certares-led investor group that it wanted the business to remain private, and Certares began reaching out to potential new partners, said Greg O'Hara, founder and senior managing director of Certares and executive chairman of the AmEx Global Business Travel board of directors.
The size of the new investment couldn't immediately be determined. AmEx will retain its 50% ownership stake, with the other half owned by a total of 12 investors including Certares, the Qatar Investment Authority and funds managed by BlackRock Inc.
The investors have made a 10-year commitment to the partnership, and Amex Global Business Travel expects to continue spending on tech development and acquisitions, Mr. O'Hara said.
Many companies that give AmEx cards to employees for expenses also use AmEx Global Business Travel to book employee travel. AmEx also issues co-branded credit cards for large airlines and hotels that view the business as an important strategic partner.
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(END) Dow Jones Newswires
December 18, 2019 02:47 ET (07:47 GMT)
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