BNP Paribas in Talks to Acquire Mercedes-Benz Leasing Business

According to foreign media reports, sources revealed that BNP Paribas SA is in advanced talks to acquire Athlon, the car leasing subsidiary of Mercedes-Benz Group.

One informed source stated that the deal could value Athlon at around 1 billion euros (equivalent to 1.2 billion US dollars). The person added that discussions are still ongoing, and it is not yet certain whether a final agreement will be reached. In addition, other companies have also expressed interest in acquiring Athlon, so the possibility of other potential bidders cannot be ruled out.

Image source: Mercedes-Benz

Both representatives of BNP Paribas and Mercedes-Benz declined to comment on the aforementioned report.

The sale of the car rental business is part of Mercedes-Benz's comprehensive evaluation plan of its operations. Bloomberg News reported earlier this year that Mercedes had approached potential buyers to assess their interest in the deal.

In 2016, Mercedes-Benz acquired Athlon from Rabobank for approximately 1.1 billion euros and stated that it would integrate it into the company's fleet management division. BNP Paribas, on the other hand, is involved in the car leasing business through its subsidiary Arval.

With the proliferation of electric vehicles, the car rental business is facing challenges because electrification makes it more difficult to predict the residual value of vehicles.

Mercedes-Benz is facing multiple market pressures: demand in China, its key market, continues to be weak; growth in its home market in Europe is sluggish; and the impact of the tariff policies of the Trump administration is squeezing Mercedes' profit margins. Last month, after an agreement was reached between the Trump administration and the EU to impose a 15% tariff on cars imported from the EU, Mercedes-Benz revised down its full-year profit forecast. Due to the pressure that tariffs exert on pricing and sales, the company now expects its annual profit margin from its car manufacturing business to drop to 4%, compared to the previous forecast of at least 6%.