Thursday morning, American Express Co. (AXP) said it inked an acquisition agreement with London-based GE Money, a unit of General Electric Company (GE). Pursuant to the agreement, American Express would acquire GE Money's commercial card and corporate purchasing business unit Corporate Payment Services in an all-cash deal of $1.1 billion. The company expects the acquisition to be completed by end of the month and sees it to be additive to its revenue growth.
The deal is expected to have a minor dilutive impact on earnings per share and return on equity in the early years following the transaction. Additionally, American Express will replace the debt that supports the receivables of the Corporate Payment Services business, currently at about $1 billion, as part of the deal.
