Infotech

Societe Generale takes another step to become a car leasing giant



Posted Apr 22, 2022, 7:28 PMUpdated on Apr 22, 2022 at 7:37 PM

Each in turn, Societe Generale’s strategic projects are progressing. Two weeks after the finalization of the partnership agreement between its subsidiary Boursorama and ING, and only a few days after the announcement of the new brand strategy resulting from the merger of its network with that of its subsidiary Crédit du Nord, the bank has just taken a new step in the transformation of its model.

On Friday, it announced the signature of the memorandum of understanding (“framework agreement”) relating to the acquisition of LeasePlan, which should create a new global car leasing giant capable of fueling the group’s future growth, alongside traditional retail and investment banking activities.

“This signature follows the finalization of the information and consultation process with the employee representative bodies concerned. [Elle] represents a firm agreement that confirms the terms of the transaction, as communicated earlier this year,” the bank said in a statement.

On January 6, Societe Generale announced the purchase of LeasePlan for 4.9 billion euros, signing in passing the largest acquisition in its history. The two groups had then concluded a “Memorandum of Understanding”, the first prerequisite to the completion of the transaction. With this new stage, the bank wants to show that it is pursuing all the programs undertaken, in a yet complicated macroeconomic context.

Reassure the markets

The world has indeed changed since the announcement of this major operation. On February 24, Russia entered the war with Ukraine. An attack that caused heavy economic sanctions, and pushed Societe Generale, like other companies, to leave the country and sell off its subsidiary there, while suffering 3.1 billion euros in losses.

The situation, as complex as it is costly, could have had an impact on the conduct of this flagship project. “By formalizing the signing of the memorandum of understanding, the group is sending a signal to the markets to reassure them and show that it is keeping to its schedule and its commitments,” explains a banking source.

There is still a long way to go, however, until the transaction is finalized. Place now to the examination of the files by the various regulators and by the competition authorities. The subject of competition will be closely scrutinized as ALD and LeasePlan operate in several common countries. Both groups may have to make some concessions. The transaction is expected to be finalized by the end of 2022.

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