Arval signs MoU to buy GE Capital Fleet Services in Europe

Vehicle leasing specialist Arval has signed a Memorandum of Understanding with GE Capital to acquire the latter’s European fleet management business. The scope of this acquisition covers more than 160,000 vehicles in 12 European countries, of which France, Germany and the UK represent more than three quarters; vehicle assets amount to €2.4bn as of Q1 2015. Parent company BNP Paribas states that the transaction will “significantly reinforce” Arval’s leading market position in Europe. The transaction should be completed in the 4th quarter of 2015, subject to necessary regulatory approvals and the final documentation’s execution following work council consultations.

This deal is part of a global transaction that sees Element Financial Corporation, Arval’s partner in North America, acquiring GE Capital Fleet Services’ businesses in the United States, Mexico, Australia and New Zealand. Through these deals, Arval and Element Financial significantly strengthen the Element-Arval Global Alliance’s reach to become a global leader, with more than 3 million vehicles in some 40 countries. Both transactions represent an aggregate of about US$8.6 billion of ending net investment.

Thierry Laborde, deputy chief operating officer of BNP Paribas and head of Domestic Markets, stated: “For BNP Paribas Group, this acquisition will enhance the presence of our fleet management business on the European markets. This transaction further illustrates the group’s active strategy to strengthen the leadership of its specialised activities in Europe.”

“Arval will become the leader in full service leasing in Europe and I am sure that our clients will highly benefit from our geographical coverage, expertise and scale,” added Arval CEO Philippe Bismut. “We are also enthusiastic about this new cooperation with Element Financial and we are deeply convinced that this will bring value to both partners.”

Keith Sherin, chairman and CEO of GE Capital, describes the two transactions as “the next step in GE’s transformation to a more focused industrial company.” GE is embarking on a strategy to focus on its high-value industrial businesses and is selling most GE Capital assets. The company’s Board of Directors have determined that market conditions are favourable to pursue disposition of these assets over the next 18 months.