Arval on brink of buying GE Capital's European arm
29 June 2015
Author: Daniel Puddicombe
Arval has signed a Memorandum of Understanding with GE Capital to acquire its European fleet management arm by the end of the year.
Arval said the scope of the acquisition covers more than 160,000 vehicles in 12 countries, with France, Germany and the UK representing more than three-quarters of the number of vehicles on GE's books, which amount to 2.4bn Euros (£1.7bn) as of Q1 2015. The acquisition is being targeted for completion in the fourth quarter of this year, subject to consultation and regulatory approval.
"For [Arval parent company] BNP Paribas Group, this acquisition will enhance the presence of our fleet management business on the European market," said Thierry Laborde, deputy chief operating officer at BNP Paribas Group. "This transaction further illustrates the group's active strategy to strengthen the leadership of its specialised activities in Europe."
Should the deal go ahead, it would move Arval up to second place in the UK leasing market, according to the latest figures from BusinessCar's BC50 research, with the firm leapfrogging ALD Automotive, Alphabet and Leaseplan with a total figure of around 144,000 on-risk vehicles.
According to the 2014 BC50, Arval was ranked in fifth place with 96,576 vehicles, while GE Capital was placed in ninth spot with 47,495 vehicles.
The last big merger in the UK leasing industry was between Zenith and Leasedrive in January last year, moving the joint business into eighth position to 57,464 vehicles in the BC50 list of the largest leasing companies in the UK. This is the first acquisition Arval has been involved with since selling its Allstar fuel card business to Fleetcor for £194m at the end of 2011.
The biggest acquisition of recent times was in 2011 when Alphabet burst into the top three in the UK through the purchase of ING Car Lease for ?637m, combining the companies then placed eight and nine in the top 10.
From a European perspective, the move would place Arval behind Leaseplan in volume terms as a leading global player. In its 2014 report, Leaseplan said it has just over one million vehicles on its European fleet as part of 1.4 million worldwide, while the GE acquisition would take Arval's global figure to around 900,000.