VW and Two Investor Groups to Acquire LeasePlan for $US 2.6 Billion
Volkswagen Financial Services, along with two co-investors, have agreed to purchase LeasePlan from its Dutch parent company ABN AMRO Bank N.V. for 2.13 billion Euros ($US 2.6 billion). VW Financial Services will hold 50 percent of the equity of LeasePlan, and the other investors – the Greek Olayan Group, a Saudi Arabian company headquartered in Athens, Greece, and the Abu Dhabi state-owned Mubadala Development Company – will own 25 percent each. Following consummation of the transaction, LeasePlan Corp. and all of its subsidiaries will retain their brand name and the corporate headquarters will remain in Almere, Netherlands. The announcement was made on April 22 by Dr. Bernd Pischetsrieder, Volkswagen AG’s chief executive officer, at the carmaker's annual meeting in Hamburg. Dr. Pischetsrieder emphasized that no management changes are anticipated at LeasePlan. The acquisition is subject to regulatory approval, including the European Monopolies and Merger Commission and the Dutch Central Bank. Volkswagen said it expected the transaction to close this autumn. This is not VW’s first venture into the fleet market. It currently owns the rental company Europcar. However, this will represent one of VW's biggest acquisitions. In 2003, LeasePlan employed about 7,000 people, and its worldwide portfolio included 1,250,000 vehicles under management. It had earnings of 193 million Euros in 2003 and assets of 10.8 billion Euros. In a statement, Tom de Swaan, ABN AMRO's chief financial officer, said the LeasePlan business was no longer "core" and the sale would allow the company to focus on its main banking activities. According to ABN AMRO, LeasePlan no longer fit into its core business structure following the lessor’s expansion into automotive services and vehicle management. ABN AMRO will continue to provide a funding facility for LeasePlan for the foreseeable future in addition to VW Financial Services and its new investment partners. "We are very pleased with this transaction. The combination of three long-term strategic shareholders will enable us to continue our business strategy focused on providing first class multi-brand fleet management services on a worldwide scale," said Hugo Levecke, chairman of the managing board and CEO of LeasePlan Corporation.“Our new investors are more aligned with our core business and are certain to be more active in supporting our business to help generate further growth and thus better products and services for our customers,” said David Dahm, CEO of LeasePlan USA. One advantage to being acquired by VW and its investment partners will be LeasePlan’s ability to enter new markets, as regulatory restrictions linked to ABN AMRO Bank prevented the company from entering certain key markets in the past.