ING Group is negotiating the sale of its ING
Car Lease arm in a potential transaction that could reportedly be
worth €4 billion.
The Dutch bank confirmed the sale of its
vehicle leasing unit was a possible option and said it was
“reviewing strategic alternatives” for the division.
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A spokesperson for the bank stressed in a
statement released today negotiations may or may not lead to a
deal.
A statement was released in response to a
Dutch newspaper article, which said the bank had been negotiating
the sale for months.
The statement said: “ING continuously
evaluates and optimises its business portfolio, in line with ING’s
stated Back to Basics objectives of sharpening its focus and
reducing complexity.
“Within this context, ING today confirmed that
it is currently reviewing strategic alternatives for ING Car Lease,
including discussions with third parties interested in a potential
acquisition.
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By GlobalData“These deliberations may or may not lead to a
transaction. Any further announcement on this matter will be made
if and when appropriate.”
The statement said ING’s other leasing
businesses, including ING Lease and ING Commercial Finance would
not be affected by the sale of Car Lease.
Car Lease was not on a list of assets marked
for disposal as a European Commission condition of the €10 billion
state bailout package the group received in 2008.
Last week the bank agreed to sell its US
online bank to Capital One Financial Corp for $9 billion (€6.32
billion).
The Dutch bank is the second major bank in a
week in discussions to sell its car leasing business following the
news RBS are selling Lombard Vehicle Management.
The article in newspaper Het Financieele
Dagblaad said the transaction could total €4 billion as a buyer
would take over €3 billion in debt and would need to inject around
€750 million in capital as a balance sheet buffer.
The article also named several leasing
companies as having been invited to negotiations. These include BNP
Paribas’ Arval, BMW Financial Services’ Alphabet, Volkswagen
Financial Services, Rabobank’s Athlon and GE Capital Solutions.
GE Capital was also mentioned in connection
with the RBS sale of Lombard Vehicle Management.
A spokesperson for Volkswagen FS told
Leasing Life it was not interested in the sale of ING Car
Lease.
A spokesperson for Arval said no one was
available to comment.
GE Capital declined to comment.
An industry source said the business may suit
sizeable providers or non-European providers looking to enter the
continent significantly with the necessary infrastructure already
in place.
These providers would look to grow returns in
the business by achieving economies of scale the source said.
The reported equity cheque required for the
transaction may deter some of the smaller players, while the debt
amount and will certainly test financial market appetite. The
source added Volkswagen and BMW have used securitizations in the
past and said this form of M&A financing could be used in a
potential Car Lease transaction, in addition to a combination of
bank and bond debt.
The reported size of the deal may put off some
of the smaller players and the required debt amount and will
certainly test financial market appetite.
ING would not comment on the sum mentioned
only confirming the unit has a fleet of 240,000 cars and employs
1,200 people across eight European countries.
grant.collinson@vrlfinancialnews.com
janet.duchenne@vrlfinancialnews.com
