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The £570m acquisition of ING Car Lease by Alphabet provides a new alternative for large business car fleets that insist on dealing only with the industry's biggest players.
Some major companies have policies that dictate suppliers have to be equally dominant in their sector, and the acquisition, which is set to be confirmed by the end of the year, promotes the combined fleet into the top three in the UK market.
BMW-owned leasing firm Alphabet has acquired ING Car Lease in a deal worth ?637m. The move doubles Alphabet's UK fleet size to just under 95,000 vehicles, and lifts the firms from the bottom two spots of the top 10 UK leasing chart to a combined third place behind Lex Autolease and Leaseplan.
"People may perceive a lack of choice but there are now more bigger players, so it's created that little bit more competition," Mike Moore, director of car consulting at Deloitte told BusinessCar. Moore added that some large fleets insist on dealing only with the top leasing firms when going out to tender on new business car deals.
ING Car Lease, which was the UK's number nine leasing company, one place ahead of Alphabet, operates in eight European countries with a total of 240,000 vehicles and around 1200 employees.
"In the growing European fleet management market, ING Car Lease is the perfect fit to complement the activities of Alphabet," said Norbert van den Eijnden, head of Alphabet. "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.
"Alphabet is concentrating on the growing full-service fleet management sector and is developing products and services for sustainable and efficient corporate mobility management. Alphabet already assists our corporate customers to manage a sustainable fleet with a focus on low fuel consumption. Fleet management will also support the introduction of electric vehicles."
There's no word yet on how the two businesses will be merged in the UK, a process expected during 2012.
ING has written to its customers informing them of the prospective deal, which is unlikely to be the last consolidation in the UK car leasing sector this year. Rumours about the acquisition of Lombard Vehicle Management continue to circulate, with GE Capital persistently linked with what was, until Alphabet's acquisition of ING, the UK's number three lease firm. "Further consolidation is inevitable," concluded Moore.
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