Flush with the acquisition of Greyhound Capital Corp, the computer leasing arm of the US long-distance bus lines operator, Bell Atlantic Corp has ambitions to become a major player around the world in the IBM computer leasing market. In Europe, the company has UKP40m earmarked for investment in its UK leasing business, and is looking for an acquisition in West Germany. This came out at a one-day-late Thanksgiving lunch hosted by the Philadelphia local telephone company at the US Embassy at London’s Grosvenor Square on Friday. In Europe, Bell Atlantic sees the leasing customer as much more savvy and the market much more sophisticated than in the US, but it finds that users are extremely nationalistic and unwilling to do business with a leasing company from another European country. However in this context, American companies are regarded as multi-nationals and therefore as acceptable leasing partners. The European market is seen as much keener than the US because customers are accustomed to taking advantage of tax breaks that are not available in the US, and of making transborder price variations and currency fluctuations work in their favour. Bell Atlantic does 80% of its business with used equipment, but has just snatched a UKP12.5m at the Royal Bank of Scotland from under Atlantic Computers Plc’s nose – despite the fact that the UK company was ostensibly offering better terms. But if the European market is a promising area for expansion, Bell Atlantic sees the Far East as the biggest potential moneyspinner: it operates there mainly through local agents who are too small to finance big deals on their own and need a big brother to help them finance their contracts. Bell Atlantic has diversified into leasing because a well managed portfolio of leased computer equipment represents a potentially profitable home for the enormous cash flows generated by a phone business.
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