Reuters reported, citing a source familiar with the matter, that Element Financial is in exclusive talks to buy PHH Corp’s fleet leasing business for about $1.35 billion in cash, in a deal structured to include significant tax benefits.

In a statement, the company said, “PHH is engaged in discussions regarding a potential sale of PHH Arval, it Fleet Management Services business. There can be no assurances that these discussions will result in a definitive agreement or on what terms. We do not intend to provide further comment at this time.”

PHH said in February it had retained J.P. Morgan Securities, Centerview Partners and Kirkland & Ellis to assist in exploring ways to maximize shareholder value through the separation or sale of the company’s fleet, mortgage business or both.

In its Q1/14 report, PHH noted that its average vehicle fleet consisted of 262,000 leased vehicles and 319,000 accident management vehicles. The company’s average number of maintenance service and fuel cards were 351,000 and 316,000, respectively.

According to Reuters, earlier this month PHH CEO Glen Messina told analysts on a conference call that the company had engaged in detailed discussions with several parties since announcing its review. He said the company expected to reach a decision by the end of this quarter.

To view the full Reuters report, click here.