In Transaction Valuing PHH Europe at Over $1 Billion
Arval/PHH in Europe and PHH/Arval in North America Will Provide Foundation
for Global Marketing of Online Services for Fleet Management and Leasing
Creating the leader in Europe for car rental services
(April 18th, 2000 )
Powerpoint File (490 Ko) : locationavecservicesgb17.04.ppt
Avis Group Holdings, Inc. and BNP Paribas Group have reached agreement to form a joint venture creating the leading vehicle management solutions brand in North America and Europe. This venture will offer a comprehensive array of fleet management and leasing solutions supported by powerful internet-based management decision-making tools.
This partnership will be based on Avis' PHH Vehicle Management Services and BNP Paribas' Arval operations furnishing the business-to-business marketplace with the leading global source for fleet management and leasing services. In North America, the alliance will be branded PHH/Arval and in Europe, Arval/PHH, sharing capabilities, marketing and a common information system platform providing unique, enhanced services to its global customers. The partnership builds on a transatlantic cross-selling agreement that PHH and Arval have had for the past five years.
As part of the alliance agreement, BNP Paribas will acquire an 80% interest in a joint venture that will own PHH Europe with a view toward merging the joint venture with Arval's European operations within one year and Avis will receive $800 million in cash. In addition, Avis will license PHH North America's award-winning, fleet management technology, PHH InterActiveSM, to the joint venture and Arval, for which Avis will receive an annual royalty. BNP Paribas will have 8 seats on the alliance company's board, Avis will have 2 seats. The transaction is expected to close in the second quarter.
Michel Pébereau, Chairman and Chief Executive Officer of BNP Paribas, stated, "This operation will enable BNP Paribas to rank N°1 in Europe, and this alliance between two leaders in their respective continents is a tremendous opportunity for BNP Paribas to further develop its business-to-business, fee-based specialized financial services operations."
A. Barry Rand, Chairman and Chief Executive Office of Avis, said, "This partnership will provide immense value to global customers - a one-stop source of innovative solutions, advanced technology and expertise that will enable customers to maximize the return on their investments and improve the performance of their people. The global brand we are creating will give these customers a consistent set of decision-management tools that will empower them to manage their businesses more effectively. We expect a seamless transition as we create a unified global brand of immense financial strength and a customer-centered culture."
The Arval/PHH venture will be the number one services provider in this industry, in Europe as a whole, and also individually in France, UK and Italy, having 545,000 vehicles under management or lease - including 380,000 in the United Kingdom and 165,000 on the Continent - and 1,300,000 fleet cards in force. In North America, PHH/Arval will start with over 450,000 vehicles under management or lease.
M. Pébereau added: "The management of Arval/PHH will be united from the start under François Dambrine, head of BNP Paribas' fleet management operations, assisted by John Cullum, currently Chief Executive Officer of PHH Europe, as head of UK operations, and Philippe Noubel, currently Chief Executive Officer of Arval, as head of Continental European operations."
PHH InterActive provides real time information on fleet usage to business customers. By linking this system globally, PHH and Arval business customers will have access to up-to-date information on their fleets around the world -- a critical management capability unmatched in the industry.
Last year, PHH was named by Information Week magazine as one of its "E-Business 100" leaders for achieving overall excellence in sophisticated technological solutions and cited PHH InterActive, a real-time information system, for particular distinction.
BNP Paribas is France's largest listed banking group. It ranks first in net income and has the fourth-largest market capitalization of all euro-zone banks. The group ranks N°1 in France and in Europe in consumer finance, and among the top three in Europe in equipment leasing. As regards vehicle management, Arval is the leader in France and Italy and N° 3 in Europe with 175 000 vehicles managed in ten countries.
Effective March 27, 2000, Avis created a new identity - Avis Group, which reflects the Company's transition to the world's leading service and information provider of comprehensive automotive transportation and vehicle management solutions. Avis operates the second largest general-use car rental business in the world. In 1999, Avis acquired PHH Vehicle Management Services, the world's second largest fleet management and leasing company, together with Wright Express, the world's largest fleet card provider.