Summary
American Express Company (AXP) announced on March 27, 2008, a significant strategic acquisition: the purchase of General Electric's Corporate Payment Services business. This division includes GE's commercial card and corporate purchasing operations, indicating AXP's intent to expand its presence in the corporate payments sector. The company stated that the acquisition will be funded primarily through its substantial cash reserves, which exceeded $17 billion as of February 29, 2008. This liquidity was bolstered by proceeds from a recent divestiture of American Express Bank Ltd. and a $3 billion debt offering completed in mid-March 2008. The move signals a proactive approach by AXP to leverage its financial strength for growth and market consolidation.
Key Highlights
- 1American Express to acquire General Electric's Corporate Payment Services business.
- 2Acquisition includes GE's commercial card and corporate purchasing operations.
- 3Transaction to be funded by existing cash reserves exceeding $17 billion.
- 4Cash position enhanced by recent sale of American Express Bank Ltd.
- 5Further liquidity strengthened by a $3 billion debt offering closed on March 19, 2008.
- 6Press release detailing the agreement was issued on March 27, 2008.