Avis and BNP Paribas Group Form Vehicle Management Solutions Brand
18 April 2000
Avis Group Holdings and BNP Paribas Group Form Leading Vehicle Management Solutions Brand in the World and Number 1 in Europe
BNP Paribas to Acquire an 80% Interest in Joint Venture
In Transaction Valuing PHH Europe at Over $1 Billion
Arval/PHH in Europe and PHH/Arval in North America Will Provide Foundation
For Global Marketing of Online Services for Fleet Management and Leasing
GARDEN CITY, N.Y. and PARIS, April 18 Avis Group Holdings,
Inc. and BNP Paribas Group have reached agreement to form a joint venture
creating the leading vehicle management solutions brand in North America and
Europe. This venture will offer a comprehensive array of fleet management and
leasing solutions supported by powerful internet-based management
decision-making tools.
This partnership will be based on Avis' PHH Vehicle Management Services
and BNP Paribas' Arval operations furnishing the business-to-business
marketplace with the leading global source for fleet management and leasing
services. In North America, the alliance will be branded PHH/Arval and in
Europe, Arval/PHH, sharing capabilities, marketing and a common information
system platform providing unique, enhanced services to its global customers.
The partnership builds on a transatlantic cross-selling agreement that PHH and
Arval have had for the past five years.
As part of the alliance agreement, BNP Paribas will acquire an
80% interest in a joint venture that will own PHH Europe with a view toward
merging the joint venture with Arval's European operations within one year and
Avis will receive $800 million in cash. In addition, Avis will license PHH
North America's award-winning, fleet management technology, PHH
InterActive(SM), to the joint venture and Arval, for which Avis will receive
an annual royalty. BNP Paribas will have 8 seats on the alliance company's
board, Avis will have 2 seats. The transaction is expected to close in the
second quarter.
Michel Pebereau, Chairman and Chief Executive Officer of BNP Paribas,
stated, "This operation will enable BNP Paribas to rank No. 1 in Europe, and
this alliance between two leaders in their respective continents is a
tremendous opportunity for BNP Paribas to further develop its
business-to-business, fee-based specialized financial services operations."
A. Barry Rand, Chairman and Chief Executive Office of Avis, said, "This
partnership will provide immense value to global customers -- a one-stop
source of innovative solutions, advanced technology and expertise that will
enable customers to maximize the return on their investments and improve the
performance of their people. The global brand we are creating will give these
customers a consistent set of decision-management tools that will empower them
to manage their businesses more effectively. We expect a seamless transition
as we create a unified global brand of immense financial strength and a
customer-centered culture."
The Arval/PHH venture will be the number one services provider in this
industry, in Europe as a whole, and also individually in France, UK and Italy,
having 545,000 vehicles under management or lease -- including 380,000 in the
United Kingdom and 165,000 on the Continent -- and 1,300,000 fleet cards in
force. In North America, PHH/Arval will start with over 450,000 vehicles
under management or lease.
M. Pebereau added: "The management of Arval/PHH will be united from the
start under Francois Dambrine, head of BNP Paribas' fleet management
operations, assisted by John Cullum, currently Chief Executive Officer of PHH
Europe, as head of UK operations, and Philippe Noubel, currently Chief
Executive Officer of Arval, as head of Continental European operations."
PHH InterActive provides real time information on fleet usage to business
customers. By linking this system globally, PHH and Arval business customers
will have access to up-to-date information on their fleets around the world --
a critical management capability unmatched in the industry.
Last year, PHH was named by Information Week magazine as one of its
"E-Business 100" leaders for achieving overall excellence in sophisticated
technological solutions and cited PHH InterActive, a real-time information
system, for particular distinction.
BNP Paribas is France's largest listed banking group. It ranks first in
net income and has the fourth-largest market capitalization of all euro-zone
banks. The group ranks Number 1 in France and in Europe in consumer finance,
and among the top three in Europe in equipment leasing. As regards vehicle
management, Arval is the leader in France and Italy and Number 3 in Europe
with 175,000 vehicles managed in 10 countries.
Effective March 27, 2000, Avis created a new identity -- Avis Group, which
reflects the Company's transition to the world's leading service and
information provider of comprehensive automotive transportation and vehicle
management solutions. Avis operates the second largest general-use car rental
business in the world. In 1999, Avis acquired PHH Vehicle Management
Services, the world's second largest fleet management and leasing company,
together with Wright Express, the world's largest fleet card provider.