BMW’s Alphabet has acquired ING Car Lease for
€637m (£573m).
The transaction is expected to close in the
fourth quarter of 2011, subject to regulatory approvals.
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The price is far below the €4bn reported
earlier this month when the news of the sale by ING was leaked by a
Dutch newspaper.
Leasing Life believes this figure
represented an estimate of the ING Car Lease balance sheet which it
is understood may be closer to €3.5bn.
The acquisition will give Alphabet a presence
in 16 European countries, adding Poland and Luxembourg to its
current roster, and nearly double the company’s total fleet.
Norbert van den Eijnden, head of Alphabet
International, said: “In the growing European fleet management
market, ING Car Lease is the perfect fit to complement the
activities of Alphabet.
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By GlobalData“Alphabet will increase the number of company
car contracts under management to approximately 540,000 and thus
consolidate its competitive lead in the European fleet management
market.”
Van de Eijnden added the acquisition will see
Alphabet concentrating on the growing full-service fleet management
sector.
When the deal is complete Alphabet will assume
control of ING Car Lease’s fleet of 240,000 cars and 1,200
employees across eight European countries.
A spokesperson for BMW would not be drawn on
the future structure of the combined businesses before the deal was
formally closed and said: “What we can say is we are happy to keep
every employee as our intention is to grow; it is not a question of
synergy and reducing headcount.”
ING said the deal will result in total
proceeds of €700m, a combination of the base purchase price plus
estimated earnings until the deal is closed in the fourth quarter
of 2011.
Jan Hommen, CEO of ING Group said: “The sale
of ING Car Lease illustrates ING’s continued actions to streamline
our business and simplify the company.
“Going forward ING will continue to build on
its leadership position as a predominantly European Bank with a
strong international network focused on providing its customers
consistent high-quality services.”
ING’s other leasing and factoring businesses,
including ING Lease and ING Commercial Finance, are not affected by
today’s announcement.
ING said the purchase price of €637m is based
on 2010 year end book value and the bank will gain €335m in sale
profit and €530m in capital release from the transaction. The
capital release will add 17 bps to core Tier 1 ratio.
The sale of Car Lease is the second disposal
of a non-core business from ING, which received a state bailout of
€10 billion in 2008, following the sale of its US online bank to
Capital One Financial Corp for $9 billion (€6.32 billion) last
month.
The combined fleet of ING Car Lease and
Alphabet in the UK will be around 95,000 and will make the company
the third largest fleet in the UK.
grant.collinson@vrlfinancialnews.com
