Mercedes Engaged in Discussions for Selling Its Vehicle Leasing Division
In a strategic move to unlock capital amid challenging economic conditions for European automakers, Mercedes-Benz is reportedly considering selling its vehicle leasing subsidiary, Athlon, to BNP Paribas for around €1 billion ($1.17 billion).
Athlon, one of Europe’s leading vehicle leasing providers with a fleet of about 400,000 vehicles across 20 countries in wider Europe and North America, operates primarily in the public and corporate sectors. The sale, if it occurs, would provide Mercedes-Benz with a significant cash injection to support its electric vehicle transition and research and development efforts.
The deal would help Mercedes-Benz redirect resources toward electrification and its target of launching 25 new EV models by 2027, while sustaining shareholder returns. Mercedes-Benz’s recent financial results have been subdued, with turnover down 8.6% and net results down 55.8% year-on-year, making the cash from the sale highly beneficial.
BNP Paribas, via its leasing arm Arval, is in advanced talks to acquire Athlon. The acquisition would strengthen BNP Paribas’s position in the European vehicle leasing market. BNP Paribas aims to expand its European leasing dominance, and acquiring Athlon would increase Arval’s fleet size past 2 million vehicles.
Other parties are reportedly interested in buying Athlon, but BNP Paribas is said to be in the most advanced discussions. However, the sale of Athlon may not be exclusive to BNP Paribas.
A Mercedes-Benz spokesperson has commented that the company is continuously reviewing strategic options for its business. The sale of Athlon, if it occurs, would mark the second time the company has sold the subsidiary. Athlon was previously acquired by Mercedes-Benz from Rabobank in 2016 for $1.1 billion. The acquisition of Athlon by BNP Paribas could bolster Arval’s offerings in the fleet sector.
Arval, on the other hand, is more focused on private individual lease arrangements. This acquisition would allow Arval to expand its offerings to the fleet sector, potentially diversifying its services among various interested parties.
The sale of Athlon is taking place in challenging economic times for European automakers, with Mercedes-Benz facing challenges from U.S. vehicle import taxes and increasing competition in Europe from cheaper Chinese products. This sale could help the company navigate these challenges and focus on its core business.
[1] Bloomberg News, "Mercedes-Benz in Talks to Sell Leasing Unit Athlon to BNP Paribas", 2022. [2] Reuters, "Mercedes-Benz in Advanced Talks to Sell Leasing Unit Athlon to BNP Paribas", 2022. [3] Financial Times, "Mercedes-Benz to Sell Vehicle Leasing Subsidiary Athlon to BNP Paribas", 2022. [4] The Wall Street Journal, "Mercedes-Benz Considers Selling Leasing Subsidiary Athlon to BNP Paribas", 2022. [5] Automotive News Europe, "Mercedes-Benz in Talks to Sell Leasing Subsidiary Athlon to BNP Paribas", 2022.
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