ALD has signed a memorandum of understanding to buy LeasePlan for €4.9bn (£4.1bn), helping the auto sector transition to zero-emission and sustainable mobility.

NewALD will be led by ALD’s Tim Albertsen as CEO

The acquisition, made through a combination of cash and shares, is expected to close at the end of 2022 and will create a combined firm, dubbed ‘NewALD’, that will be a leading global player in mobility worldwide and will “embrace the mobility sector’s global growth megatrends”.

The combined business will be led by ALD CEO Tim Albertsen and will be key in moving the auto sector from ownership to usership models and zero-emission vehicles, according to the firms. It will also continue to accelerate towards data-driven digital transformation of the mobility industry.

Tim Albertsen, CEO of ALD, commented: “In the context of today’s transformation of the automotive and mobility sectors, which is proceeding at an unprecedented pace, this proposed transaction is instrumental in the creation of a leading global player in mobility. By combining the multiple strengths of ALD and LeasePlan, gaining size, joining forces in digital and creating a leading provider of sustainable mobility solutions, we would transform our industry and be best positioned to deliver even better solutions and value propositions to our enlarged client base.”

The merger will draw on the two companies’ complementary capabilities, spanning the B2B, B2C and B2E sectors. The increased size of the new business is also expected to provide key advantages; from global offering and coverage of all client categories, to an increased portfolio of products and services, and a “balanced” geographic coverage.

ALD, which is listed in France and majority-owned by Société Générale, provides full-service leasing and fleet management services across 43 countries to a client base of large corporates, SMEs, professionals and private individuals. As of mid-2021, it managed 1.76 million vehicles.

LeasePlan has approximately 1.8 million vehicles under management in 29 countries under its Car-as-a-Service banner. Its former CarNext online B2C and B2B used car marketplace was carved out into an independent business in July 2021 after raising €400m (£334m).

At the closing of the proposed acquisition, Société Générale will own around 53% of NewALD while LeasePlan’s selling shareholders will hold 30.75%. Société Générale will also commit to remaining the long-term majority shareholder going forwards.

The deal will position NewALD for long-term fleet growth of at least 6% p.a. post-integration. Cost-to-income ratio is being targeted to improve to around 45% by 2025, said to confirm its position as best-in-class in the industry and underpinned by scale effects and cost synergies. The deal is also expected to provide strong shareholder returns.

Tex Gunning, CEO of LeasePlan, said: “The combined business would be instrumental in moving the automotive industry from ownership to subscription models and zero-emission mobility. By joining forces with ALD, we combine the best talents in the industry with the investment power needed to meet the next-generation mobility needs of our customers. From day one, NewALD would be operating one of the largest fleets of electric vehicles and will continue to set the standard for ESG in the mobility industry. I am very proud of all LeasePlanners for bringing our business to where it is today. We are looking forward to working with the excellent team at ALD and taking our combined business into the exciting future of mobility.”

ALD and LeasePlan had announced late-October 2021 that they were in talks over a merger. According to reports earlier in 2021, LeasePlan part-owner TDR Capital had been considering a sale after buying into LeasePlan in 2015, and was exploring options for the business after receiving approaches from strategic investors. A merger with ALD was rumoured then.

The proposed transaction has received the support of Société Générale’s, ALD’s and LeasePlan’s Boards of Directors, as well as LeasePlan’s Supervisory Board, and is subject to information and consultation of relevant works councils. The closing of the deal is subject to regulatory approvals.

The transaction excludes LeasePlan Australia and LeasePlan New Zealand, which were sold to SG Fleet, effective 1 September 2021.