General Electric Company (NYSE:GE) is pursuing its mission of selling its financial arm GE Capital’s assets worth $500 billion. The firm is selling its U.S., Mexico, Australia, New Zealand and Europe fleet businesses to Canada’s Element Financial Corp and Arval, a fully owned unit of France’s BNP Paribas SA. GE Capital Fleet Services provides commercial car and truck financing and fleet-management services.
GE has inked deal with the Element Financial Corp to sell its U.S., Mexico, Australia and New Zealand fleet businesses worth $6.9 billion. Further the firm has also signed a memorandum of understanding for sale of its Europe fleet businesses to Arval, a unit of France’s BNP Paribas SA. Arval’s deal is expected to close at the end of the current year. Arval and Element work as partners in North America.
“We are on track to execute sales of $100 billion by the end of 2015 and expect to be substantially done by the end of 2016,’ said Keith Sherin, GE Capital Chairman and Chief Executive.
GE has recently sold its private-equity-lending unit to Canada’s largest pension for $12 billion as a part of shedding plan. GE is largely throwing away its banking business in an attempt to skip tough regulatory merit scrutiny. So far GE’s announced sales that totaled $63 billion.
Back in 2013 Element acquired GE Capital’s Canadian fleet-management business, and now that deal marks its second with GE.
“Adding these very high quality businesses to our existing fleet operations firmly establishes Element as a leader in the North American fleet-management industry,” said Steven Hudson, Element’s CEO.
Element will finance the deal with profits from a recent C$2.7 billion securities offering and with C$5.9 billion in loan, and further estimating yearly cost savings and revenue gains of $90 million to $95 million from the deal.
The U.S. and Mexico part of the deal is expected to close in the third quarter this year, with the Australia and New Zealand part in the fourth.
