BMW's fleet management division agreed to buy ING Groep NV's car-lease unit for about €700 million (Dh3.66 billion), boosting its presence in Europe to 16 countries.
Alphabet, the fleet business of luxury-automaker Bayerische Motoren Werke AG, will pay ING, the biggest Dutch financial-services company, €637 million plus estimated earnings until closing, the Amsterdam-based bank said in a statement. The deal, which needs regulatory approval, may be approved in the fourth quarter, the companies said.
"In the growing European fleet-management market, ING Car Lease is the perfect fit to complement the activities of Alphabet," Norbert van den Eijnden, head of the BMW unit, said in a separate statement.
"Alphabet will increase the number of company car contracts under management to approximately 540,000 and thus consolidate its competitive lead."
The transaction expands opportunities for Munich-based BMW, the world's biggest manufacturer of luxury cars, to promote its premium models to fleet customers such as corporations that provide vehicles for employees. For ING, the disposal is an opportunity to scale back operations, it said.
ING rose as much as 1.3 per cent to €8.63 and was up 0.5 per cent. BMW gained as much as 0.4 per cent to €69.56 and was up 0.2 per cent in Frankfurt.
Alphabet already operates in 14 European countries. The acquisition of the ING unit will add Poland and Luxembourg as markets, Micaela Sandstede, a BMW spokeswoman, said by phone.
The Dutch bank and insurer, which was among European firms that needed state aid during the credit crunch almost three years ago, plans to reduce its balance sheet by about 45 per cent by 2014 from 2008 levels.
ING pledged to sell its insurance divisions as a condition for European Union approval of its bailout. The car-lease unit's disposal wasn't part of the EU's demands.
"The sale illustrates ING's continued actions to streamline our business and simplify the company," Chief Executive Officer Jan Hommen said in the statement.
ING's car-leasing unit operates 240,000 vehicles in eight European countries.
Its workforce totalled 1,200 employees at the end of last year.
From / Gulf News