American Express has agreed to purchase Corporate Payment Services, GE's commercial card and corporate purchasing business unit, for $1.1 billion in cash.
The sale, which is subject to customary closing conditions and certain regulatory approvals, is expected to be completed by the end of the month.
Corporate Payment Services, a MasterCard-based product, was created in 1992 to issue GE's corporate travel and entertainment cards and purchasing cards to GE employees. It has expanded to serve more than 300 large corporate clients. GE continues to be the unit's largest single client and has signed a multiyear agreement to become a client of American Express.
American Express said the acquisition is part of an ongoing strategy to focus on the payments sector, noting that the deal follows last month’s sale of its international banking subsidiary.
Corporate Payment Services' products are similar to those offered by American Express' commercial card business, which handles the travel, entertainment and purchasing spending by employees of large corporations and midsize companies. Accounts are typically paid in full at the end of each month, rather than through a revolving credit account.
The sale also includes the purchase of GE's patented vPayment technology, automation that integrates corporate procurement with accounts-payable systems. vPayment, which was designed for large purchases, is equipped with ant-fraud technology.
Corporate Payment Services has approximately 350 employees, largely at the company's Salt Lake City headquarters.