8-KRegulation FD

AMERICAN EXPRESS CO 8-K Report, Regulation FD Disclosure (Nov 2, 2021)

Filed November 2, 2021For Securities:AXP

Summary

American Express Company (AXP) announced on November 2, 2021, that its non-consolidated joint venture, American Express Global Business Travel (GBT), has successfully acquired Egencia from Expedia Group. This strategic transaction involves Expedia Group acquiring an ownership stake in GBT. Consequently, American Express's economic interest in GBT has decreased from approximately 50% to about 41%, although its voting rights remain at 50%. Investors should note that this transaction is expected to result in a pre-tax non-cash gain of approximately $240 million for American Express in the fourth quarter of 2021. This gain, stemming from the increased equity book value of GBT due to the acquisition, was not previously factored into the company's earnings per share projections for 2021 shared during their third-quarter earnings call.

Key Highlights

  • 1American Express's joint venture, Global Business Travel (GBT), has completed the acquisition of Egencia.
  • 2Expedia Group has acquired a percentage of ownership in GBT as part of the transaction.
  • 3American Express's economic interest in GBT is reduced to approximately 41% from 50%.
  • 4American Express retains 50% of the voting rights in GBT.
  • 5A pre-tax non-cash gain of approximately $240 million is expected in Q4 2021.
  • 6The recognized gain was not included in prior 2021 EPS guidance.

Frequently Asked Questions

The primary event is the announcement that American Express's joint venture, Global Business Travel (GBT), has completed its acquisition of Egencia from Expedia Group. Expedia Group is also acquiring an ownership stake in GBT as part of this transaction.

American Express's economic interest in GBT will decrease from approximately 50% to about 41%. However, its voting rights in GBT will remain at 50%.

American Express expects to recognize a pre-tax non-cash gain of approximately $240 million in the fourth quarter of 2021. This gain is due to the increase in GBT's total equity book value resulting from the Egencia acquisition.

No, this expected $240 million gain was not reflected in the two earnings per share scenarios that American Express provided on its third-quarter 2021 earnings call.