Arval PHH, BNP Paribas’ car rental services subsidiary, has signed an agreement for the acquisition of 100 percent of Arma, a company which provides long-term car fleet leasing services, with its main activity in the Netherlands.

Arma manages 290 million euros in assets and operates a combined fleet of 20,000 vehicles in the Netherlands, Belgium, and the United Kingdom. Arma’s largest market is the Netherlands where it has a fleet of 15,400 vehicles, making it the seventh largest long-term car leasing company with a market share of about 3 percent. Since its foundation in 1989, Arma has shown consistent and solid growth in terms of fleet size and profits.

The new entity - which will emerge out of the combination between Arval PHH Holland, Arval PHH’s subsidiary founded in 1999, and Arma Netherlands - will manage at the end of 2003 approximately 19,000 vehicles in the Netherlands and become the country’s sixth largest car leasing services group. In Belgium, the new entity will manage 17,000 vehicles and rank as the country’s fourth largest in the local market.

This acquisition confirms BNP Paribas’ leading role in specialised financial services in Europe and helps Arval PHH consolidate its international network by bolstering its position in the key Dutch market, Europe’s fourth largest for long-term fleet leasing services. With its new larger size and greater visibility in the Netherlands, Arval PHH will further expand its local customer base and enhance its competitive position in the increasing number of public tenders held in Europe.

The deal has been approved by the Workers Council of Arma but has to be cleared by the Dutch and Belgium’s antitrust authorities, and is subject to conditions that are customary in this type of transaction.

BNP Paribas was advised in this transaction by Lehman Brothers.

A subsidiary of BNP Paribas, Arval PHH is active in 16 countries. Arval PHH specialises in developing and implementing long-term car leasing solutions for small- and medium-sized companies as well as for large corporates, and manages over 600,000 vehicles in Europe.