This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

The Deal: American Express to Sell $2B Stake in Travel Business

NEW YORK (The Deal) -- American Express (AXP) said Wednesday it was in talks to sell a 50% stake in its business travel unit to Certares International Bank in a deal that would value the unit at upward of $2 billion.

New York-based American Express said that it is in discussions about New York-based Certares injecting between $700 million and $1 billion into American Express Global Travel in return for a 50% stake. American Express would maintain a 50% stake in the venture under the terms of the deal, which is subject to a definitive agreement and receipt of regulatory approvals.

Amex said it expects the deal to close in the second quarter of 2014, at which time the company expects to recognize a gain.

The announcement follows attempts by American Express to revamp the business, which has come under pressure from cheaper, online methods for booking corporate travel. The company in January slashed 5,400 jobs, including a large number of workers in its travel business, and said it was looking to develop tools to allow it to better compete with online travel agencies.

Stephen J. Squeri, group president of Amex global corporate services, in a statement said the talks with Certares are the next step in reshaping the travel unit.

"We've been making strong progress in our efforts to transform our corporate travel business," Squeri said. Certares' funds will be used to develop new products and services that the executive said are necessary to build the travel group's U.S. and international customer base.

Global Travel has operations in 138 countries and generated commissions of $1.94 billion in 2012.

"We anticipate that the expansion of our business travel offerings will not only help us grow GBT, but it would also provide additional value to our corporate payments customers, which would help us accelerate growth in that business as well," Squeri said. "We believe this structure will provide superior opportunities for delivering customer benefits, retaining world-class talent and achieving long-term success."

Certares is led by Michael Gregory O'Hara, the one-time chief investment officer of J.P. Morgan Chase's (JPM) special investments group and former managing director with the bank's One Equity Partners private equity arm. He is also a former director at travel reservation system Worldspan.

O'Hara is also co-chairman of the board at Travel Leaders Group, a travel agency consolidator.

Written by Lou Whiteman

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
DOW 17,039.56 +60.43 0.36%
S&P 500 1,992.35 +5.84 0.29%
NASDAQ 4,532.1040 +5.6220 0.12%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs