A new leading player in car leasing was born today: a player with a combined fleet of approximately 3.5 million vehicles, with extensive geographical coverage and creating value for its shareholders. The managers of ALD Automotive, Societe Generale’s long-term car rental subsidiary, do not hide their satisfaction at the announcement of the planned acquisition of Dutch competitor LeasePlan. The two companies entered into negotiations in the fall.
ALD has just signed a memorandum of understanding to take the entire capital of LeasePlan, put up for sale by its shareholders (TDR Capital, the Abu Dhabi sovereign wealth fund), and thus create a new group, called NewALD. ” The planned acquisition for a total amount of 4.9 billion euros would be financed both in shares and in cash “, specifies the lessor in a press release. 1.3 billion will be financed via a capital increase with maintenance of preferential subscription rights and guaranteed by Société Générale. At the end of the operation, the bank with the red and black logo will remain the majority shareholder of NewALD, with a stake of approximately 53%, the current shareholders of LeasePlan holding 30.75% of the shares that they agree to keep for at least one year.
Effect positive on earnings per share
If the Banque de la Défense, like BNP Paribas and Crédit Agricole, is accelerating in car leasing, it is because the business is profitable and provides an additional source of income, at a time when retail banking is bringing in less. ” Ihe activities of the combined entity are intended to become a third pillar in the medium term alongside the businesses of retail banking and insurance on the one hand, and corporate and investment banking on the other, and to strengthen the balance of its business model, indicates Frédéric Oudéa, the boss of Societe Generale, in a press release. More generally, this acquisition project is fully in line with the group’s strategy aimed at delivering profitable and sustainable growth and strong value creation for its shareholders. »
The operational and purchasing synergies resulting from the transaction are estimated at approximately €380 million before tax on a full-year basis by 2025, when NewALD will achieve a cost-to-revenue ratio of 45%, compared to a target of 46 48% for the current ALD. For shareholders, this will result in a positive effect on normalized pro forma earnings per share of around 20% in 2023 for NewALD and above 5% for Societe Generale from 2024. “ In the medium term, NewALD’s dividend distribution rate would be between 50% and 60% until 2025 adds ALD. The transaction, which must still be approved by the regulatory authorities, should be finalized by the end of the year.
This promising operation is Societe Generale’s biggest leap into automobile leasing since the bank began to develop in this market in the early 2000s. mid-morning.