BNP Paribas, parent of Arval, will pay $800 million (€750 million), for an 80% stake in a joint venture that will own PHH Europe.
Avis Group Holdings, the former owner of PHH Europe, will retain a 20% stake in the joint venture and have three seats on the alliance company's 10-strong board. Avis will use the cash payment to settle its debts, and will also licence the joint venture to use its fleet management software, PHH InterActive, in return for an annual royalty.
Arval plans to merge its European operations with the joint venture under the name Arval/PHH within one year, creating a pan-European fleet of 545,000 vehicles in Belgium, France, Germany, Ireland, Italy, the Netherlands, Portugal, Spain and the UK.
Arval/PHH will have a close relationship with PHH in North America, that will rebrand as PHH/Arval, although Avis will retain 100% ownership of the North American operation and its 450,000 vehicles under management or lease.
Michel Pebereau, chairman and chief executive officer of BNP Paribas, said: 'This alliance is a tremendous opportunity for BNP Paribas to further develop its business-to-business fee-based specialised financial services operations.'
Barry Rand, Avis Group chairman and chief executive officer, said: 'This exciting new venture with BNP Paribas not only supports our long-term growth plans but reflects our relentless determination to seize new growth opportunities that will build upon our premier brands and internet decision-making tools.'
The deal, revealed by Fleet News Europe in May, still requires European regulatory approval. (August 2000)