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.