EXHIBIT 99.1
NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE NEWS RELEASE
[LOGO OF AMERICAN EXPRESS COMPANY] [LOGO OF GE MONEY]
Contacts: Gail Wasserman Robert J. Rendine
American Express GE Money
212 640 9273 203-585-2084
Gail.Q.Wasserman@aexp.com robert.rendine@ge.com
FOR IMMEDIATE RELEASE
AMERICAN EXPRESS TO ACQUIRE GE MONEY'S
CORPORATE PAYMENT SERVICES PORTFOLIO
GE Unit Provides Payment and Purchasing Cards to
More Than 300 Large Corporations
New York - March 27, 2008 - American Express Company and GE Money today
announced that they have entered into an agreement for American Express to
purchase Corporate Payment Services, GE's commercial card and corporate
purchasing business unit, for $1.1 billion in cash. The sale, which is subject
to customary closing conditions and certain regulatory approvals, is expected
to be completed by the end of the month.
Corporate Payment Services was created in 1992 to issue GE's corporate travel
and entertainment cards and purchasing cards to GE employees. It has expanded
to serve more than 300 large corporate clients. GE continues to be the unit's
largest single client and has signed a multi-year agreement to become a client
of American Express.
For American Express, today's agreement is part of an ongoing strategy to
focus on the payments sector and follows the sale last month of its
international banking subsidiary.
Corporate Payment Services generated over $14 billion in 2007 global purchase
volume and maintained $1.1 billion in receivables at year end 2007. Its billed
business has grown at a compounded rate of 18% over the last five years.
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Corporate Payment Services' products are similar to those offered by American
Express' commercial card business, which handles the travel, entertainment and
purchasing spending by employees of large corporations and mid-sized
companies. Accounts are typically paid in full at the end of each month,
rather than through a revolving credit account.
The sale also includes the purchase of GE's patented vPayment technology,
which provides fast and efficient payment for large ticket purchases. This
platform provides unique account numbers for each transaction that expire once
the purchase has been authorized. As a result, vPayment permits the processing
of large transactions with effective fraud controls.
Anre Williams, President of American Express's Global Commercial Card &
Services said, "Corporate Payment Services is a terrific business with strong
leadership and talented employees who have been generating impressive growth
through a combination of excellent customer service and cutting edge
technological innovation. Expanding our corporate purchasing and expense
management services is a top priority for American Express. Acquiring
Corporate Payment Services adds to our purchasing card capabilities and gives
us the opportunity to accelerate our growth. In addition, Corporate Payment
Services also has excellent credit metrics and a premium client base."
Corporate Payment Services has approximately 350 employees largely based in
Salt Lake City.
Mr. Williams added, "We look forward to welcoming Corporate Payment Services'
employees into the American Express family and working closely with them to
provide seamless service and a smooth transition for all clients."
Mark Begor, President & CEO of GE Money-Americas, said, "CPS has been a
terrific GE growth story, and today's announcement underscores the value we've
created from a business that essentially had a single client only about a
decade ago. This transaction meets GE's strategy of redeploying assets in
financial services and is a win for GE, our
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shareowners, and our customers, who will be well served by the powerful
combination of CPS's existing capabilities and American Express's strong
market leadership."
American Express expects that this acquisition will be additive to revenue
growth. It is expected to have a minor dilutive impact on earnings per share
and return on equity in the early years following the transaction. This
dilution estimate assumes that the cash used for the acquisition would
otherwise be used for the repurchase of American Express common shares.
Separately, as part of the transaction American Express will replace the debt
that supports the receivables of the Corporate Payment Services business. That
debt currently totals approximately $1 billion.
The American Express Company is leading global payments and travel company.
More information can be found at
http://www.americanexpress.com/corporateservices.
With more than $200 billion in assets, GE Money, a unit of General Electric
Company, (NYSE: GE) is a leading provider of retail banking and credit
services to consumers, auto dealers and retailers in more than 50 countries
around the world. With more than 130 million global customers, GE Money, based
in London, UK, offers a range of financial products, including private label
credit cards, personal loans, bank cards, auto loans and leases, mortgages,
corporate travel and purchasing cards, debt consolidation and home equity
loans, and credit insurance. More information can be found at
http://www.global.gemoney.com
***
THIS RELEASE INCLUDES FORWARD-LOOKING STATEMENTS, WHICH ARE SUBJECT TO RISKS
AND UNCERTAINTIES. THE WORDS "BELIEVE," "EXPECT," "ANTICIPATE," "OPTIMISTIC,"
"INTEND," "PLAN," "AIM," "WILL," "MAY," "SHOULD," "COULD," "WOULD," "LIKELY"
AND SIMILAR EXPRESSIONS ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
READERS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE ON THESE FORWARD-LOOKING
STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE ON WHICH THEY ARE MADE. WE
UNDERTAKE NO OBLIGATION TO UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS.
FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THESE
FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO, THE UNDERLYING
ASSUMPTIONS RELATED TO THE TRANSACTION PROVING TO BE INACCURATE OR UNREALIZED,
THE LIKELIHOOD OF AND TIMING FOR COMPLETION OF THE TRANSACTION, THE ABILITY TO
MANAGE OPERATIONAL RISKS IN MIGRATING GE'S CORPORATE PAYMENT SERVICES BUSINESS
TO THE AMERICAN EXPRESS NETWORK, AND THE TRANSACTION'S IMPACT ON THE FUTURE
EARNINGS AND RETURN ON EQUITY OF AMERICAN EXPRESS, WHICH WILL DEPEND ON THE
NUMBER OF GE CUSTOMERS AND RELATED VOLUME RETAINED BY AMERICAN EXPRESS, AMONG
OTHER FACTORS.
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