Merger ALD-LeasePlan: ALD, the banker’s daughter who got married
The ideal banker is prudent, going on boring. The typical banker’s daughter wants a bit more excitement from life. That would explain ALD Automotive’s wholehearted embrace of the startup mentality, and its zeal for innovation. The merger with LeasePlan would yet be another radical move for the SocGen subsidiary.
The Société Générale – SocGen for short – is one of the crown jewels of France’s economy. With a history going back to 1864, it is one of the ‘trois vielles’, the three grand old banks of France (together with BNP Paribas and Crédit Lyonnais). Just one example of its historical importance: the bank helped finance the Eiffel Tower. But it remains as vital today is it is venerable.
In 2001, SocGen sensed that the fleet industry was going through a period of concentration and seized the opportunity to acquire ALD, the fleet management subsidiary of Deutsche Bank. It merged ALD with its own fleet daughter Temsys to form ALD Automotive.
The new company, present in eight European markets and market leader in Germany, tailored its leasing offers primarily to the needs of large corporate fleets. Over the past 20 years, robust growth – both organic and through acquisitions – and smart decisions have elevated ALD into the small club of world-leading fleet management and vehicle leasing providers.
Today, the France-based company provider manages a global fleet of around 1.8 million vehicles in total and is present in 43 countries around the world – in 27 of which it holds a Top 3 market position. By number of contracts (and excluding OEM captive lessors), ALD is ranked third worldwide and first in Europe.
First major IPO
In June 2017, ALD launched an IPO, the first major European leasing company to do so. The IPO, on Euronext in Paris, garnered about €1.16 billion for just over 20% of the total stock, meaning the entire company was market-valued at €5.78 billion. Société Générale retains 80% of the shares.
With a nimbleness belying its size, ALD has moved itself to the forefront of several trends transforming mobility worldwide, not least in terms of electrification. In 2020, under its new CEO Tim Albertsen, the company launched a strategic plan called Move 2025.
Its aim is to leverage ALD’s leading positions in leasing, digitalisation and electrification to become a leader in fully-integrated, sustainable mobility. The plan rests on four pillars, and targets four key deliverables.
- Move for Customers. ALD aims to offer best-in-class, customised products and services, focusing on the digital customer experience.
- Move for Growth: ALD is ready to capture growth, wherever it presents itself – both geographically (e.g. Latin America, Asia) and in terms of business segments (e.g. SMEs, private lease, sustainability).
- Move for Good: ALD wants to provide sustainable products and services, be a responsible employer and reduce its own environmental footprint.
- Move for Performance: ALD wants to use data and digitalisation to further improve its efficiency.
Four key deliverables
- Leasing and fleet management: ALD wants to invest in consultancy for large corporates, LCV-driven services for SMEs, new- and used-car lease offers for consumers and specific offers for employees.
- Remarketing: ALD is preparing for multi-cycle and multi-channel remarketing, which will become common when EVs have overtaken ICEs.
- Digital investment: increased spending across all four pillars will focus on connectivity.
- Electric mobility: by 2025, ALD expects 30% of its new car deliveries to be EVs. That figure will rise to 50% by 2030. It’s a substantial difference with LeasePlan that has committed itself to a 100% net-zero emission funded fleet by 2030
Within the Move 2025 framework, ALD is stepping up the implementation of its future-facing products and services. ALD Flex aims to respond to greater market demand for flexible leasing solutions, and ALD Electric is an offer designed to mainstream EVs in the very near future. Already today, 24% of ALD’s fleet is low- or zero-emission – making it very likely that it will hit the 30% target well before 2030.
By 2025, ALD wants to have 30% low- and zero-emission vehicles in its fleet – a target that it may reach a lot sooner, since the figure is already at 24% today. The company also sees private lease and eLCVs in particular as important areas of future growth. And traditionally, ALD has operated a large part of its fleet via partnerships – presently about 30% of the total.
As one of its USPs, ‘partnering’ will remain a focus for the company in the near future; not just with banks and insurers, but also with OEMs, start-ups, new-mobility providers and other disruptors. ALD has leasing arrangements in place with EV manufacturers such as Tesla, Polestar and Lynk & Co., for example. Only recently it acquired subscription specialist Fleetpool in Germany.
By 2025, ALD aims to be present in 50 markets, half a dozen more than the current tally – with special interest in developing opportunities in South East Asia.
It’s easy to see how some of ALD’s strategic targets will be boosted by an acquisition of LeasePlan. At the same time, managing and digesting a corporate takeover of this magnitude will consume a serious amount of time and effort, which may put some goals on the backburner and have some serious impact on service quality.
And then there is the merger of its North American partner Wheels Inc. with Donlen. Will ALD continue with the new Donlen-Wheels configuration in North America or will it rely on the activities of LeasePlan over there?
So, ALD will need to make some important choices in the near future. Two voices will be whispering in Tim Albertsen’s ear: one of a prudent banker, the other of a creative banker’s daughter. Will one win, or will both compromise?
Picture caption: In June 2017, ALD successfully launched an IPO on Euronext in Paris, France.
Picture credit: ALD Automotive.