ALD, a subsidiary of Société Générale, to acquire LeasePlan for 4.9 billion euros


PARIS (Agefi-Dow Jones) – Banque Societe Generale announced Thursday that its subsidiary specializing in long-term vehicle financing ALD intends to acquire its Dutch competitor LeasePlan for 4.9 billion euros from a consortium led by the private equity firm TDR.

The planned acquisition of 100% of LeasePlan’s capital would be “financed both in securities and in cash,” Société Générale said in a press release. The bank expects to complete the transaction by the end of 2022.

“Societe Generale would undertake to remain the majority shareholder of the new group (” NewALD “) with a participation of approximately 53% of the capital at the closing of the transaction, the shareholders of LeasePlan receiving a participation of 30.75% in the context of payment in securities, “said the bank. Societe Generale currently holds 79.8% of the capital of ALD.

The payment of € 2 billion in cash to LeasePlan shareholders will be financed by ALD through a capital increase with preferential subscription rights of approximately € 1.3 billion and the use of approximately 0, 7 billion euros in excess capital, stressed Societe Generale.

“Such a transaction would greatly create value for shareholders with an increase in net earnings per share of around 20% for NewALD in 2023 and greater than 5% for Societe Generale from 2024,” said the bank.

“Societe Generale’s profitability (ROTE) should increase by around 80 basis points by 2024. At the group level, the expected impact on capital at closing [à la réalisation de l’acquisition, ndlr] would be around -40 basis points, “added Societe Generale.” The return on investment should reach more than 16% by 2024, “the bank said.

A “structuring” acquisition

“This structuring project would mark a major step in the creation of a world leader in the mobility sector, benefiting from very complementary expertise and synergies”, estimated Societe Generale.

“With enhanced investment capacities and differentiating know-how, the combined entity would be particularly well positioned to take advantage of underlying trends in this market, namely the changing needs of customers from vehicle ownership to its use, the switch from vehicle fleets to electric vehicles and the growing use of digital technologies to enhance the services provided, “added the bank.

The group anticipates operational and purchasing synergies of around 380 million euros before tax and on an annual basis. “These significant synergies should be fully realized in 2025. Estimated at 1.25 times the amount of synergies, once they have been fully implemented on an annual basis and before tax, restructuring costs should be incurred in 2023 and 2024”, Societe Generale said.

In addition, “NewALD would aim to improve its cost / income ratio to around 45% in 2025”, against a target of 46 to 48% for the current ALD in its strategic plan “Move 2025”, detailed the bank.

NewALD would also aim for a CET1 capital ratio of around 13% and an overall capital ratio of 15% to 16%.

These levels of solvency and profitability should allow the new entity to finance its growth and maintain a payout ratio of 50% to 60% of net income, group share, forecasts Societe Generale.

-Alice Doré, Agefi-Dow Jones; +33 (0) 1 41 27 47 90; [email protected] ed: VLV

Agefi-Dow Jones The financial newswire

Dow Jones Newswires

January 06, 2022 02:27 ET (07:27 GMT)



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