PARIS: French bank Societe Generale said its car leasing division ALD had agreed to buy the company Lease Plan for 4.9 billion euros ($5.5 billion), creating a new market leader in its area and boosting value for SocGen shareholders.

SocGen said the deal would result in a new, enlarged company with a total combined fleet of around 3.5 million vehicles, and would be an earnings accretive transaction.

The takeover will give SocGen's ALD division more scale as they change their fleet of vehicles to take in more electric cars, and it also comes some four years after Societe Generale floated a minority stake in ALD at 14.30 euros a share, a level below which the stock has been largely trading ever since.

The LeasePlan acquisition also comes with SocGen having cash to deploy after selling non-core assets such as its asset management arm Lyxor in recent years.

SocGen Chief Executive Frederic Oudea is in the midst of a broader strategy revamp at the bank - started in 2018 - which he is hoping can shore up his legacy before his term expires in 2023.

SocGen's share price is still well below where it was when Oudea took over, although it has rallied around 90% in the past year as it rebounded from trading losses at the start of the COVID pandemic.

"This proposed transaction is a major step for ALD and for the Societe Generale group. Over the past 10 years, thanks to long-term vision and rigorous execution, we have positioned ALD to take advantage of the tremendous growth potential in the sustainable mobility market," said SocGen CEO Frederic Oudea.

SocGen said it would hold a majority 53 percent stake in the new entity formed by ALD's takeover of LeasePlan.

It added that the LeasePlan takeover would result in a net earnings per share accretion of more than 20% for the new company formed by the deal in 2023, as well as resulting in a boost of more than 5% in net earnings per share for SocGen from 2024.