ALD buys LeasePlan in €5 billion deal
10 January 2022
ALD Automotive, the car-leasing business of French bank Société Générale (SocGen), plans to acquire its Dutch rival LeasePlan for €4.9 billion in cash and shares. The purchase will create Europe’s biggest car-leasing group, dubbed NewALD.
Once established, the new company would manage the biggest fleet of electrically-chargeable vehicles (EVs) in Europe. The businesses expect to close the deal by the end of the year, with SocGen holding a 53% stake in the new entity.
Based in France, NewALD will have a combined fleet of 3.5 million vehicles. ALD manages around 1.7 million cars while LeasePlan has a fleet of 1.8 million in more than 29 countries. Both companies said the acquisition would allow them to build a leading global mobility player as they hope to profit from trends, such as the shift to zero-emission vehicles and changing patterns of ownership.
New chapter
‘Today marks the beginning of a new chapter in our history as a first step towards creating NewALD,’ said ALD CEO Tim Albertsen. ‘By combining the multiple strengths of ALD and LeasePlan, we would transform our industry and value propositions to our enlarged client base. This transaction would create multiple opportunities to the joint management teams and talents of both companies, across geographies, underpin our focus on sustainability with a clear path to zero-emissions mobility.’
One of LeasePlan’s previous majority shareholders was Volkswagen (VW) Group. The German carmaker sold its 50% stake in the business in 2016 as part of cost-cutting measures. Since then, it has been held by a group of investors that includes TDR Capital.
With the planned acquisition, SocGen is betting on the electromobility boom. Amid the shift to EVs, more consumers and companies are expected to opt for flexible arrangements, such as renting and leasing, to try out different vehicles, including electric ones.
NewALD aims to provide increased services to meet future market needs and client expectations. It plans to invest and develop new mobility products to build digital business models. The company wants to focus on sustainable mobility, aiming to support the transition to EVs by creating global partnerships around electromobility.
Synergies
‘The combined business would be instrumental in moving the automotive industry from ownership to subscription models and zero-emission mobility,’ said Tex Gunning, LeasePlan CEO. ‘NewALD would be operating one of the largest fleets of electric vehicles and will continue to set the standard for ESG (Environmental, Social, and Governance) in the mobility industry.’
The deal shows how European banks are branching out activities to cash in on profitable business opportunities. For SocGen, the leasing business is particularly lucrative as the French bank plans to make vehicle leasing a major pillar of its operations alongside retail and investment banking. It added the transaction would generate operational synergies amounting to €380 million of annual profits before tax. SocGen also said it is committed to remaining the long-term majority shareholder of NewALD.
Other banks are also showing growing interest in leasing operations. Last month, Stellantis said it was in exclusive talks with BNP Paribas, Crédit Agricole and Santander over the reorganisation of the carmaker’s leasing and financing operations in Europe. The deal is subject to approval from the relevant authorities.
