General Electric Company (NYSE:GE) is looking forward to sell majority of its financing segments. The company said it has decided to unload commercial lending and leasing segments to Wells Fargo & Co (NYSE:WFC). The businesses are valued at more than $30 billion.
The company has so far made transactions of $126 billion, accomplishing more than 50 percent of its overall goal since the U.S. conglomerate revealed in April that it plans to cut its GE Capital financing division to less than 10 percent of profit so that it can concentrate on industrial manufacturing operations. GE Capital represented 42 percent of the company’s overall earnings last year.
One important GE Capital segment of the company is left in the United States i.e. its franchise finance unit having assets of worth $5.5 billion.
It is critical for GE to move quickly on its U.S. transactions as the company plans to get rid of GE Capital’s regulatory label as SIFI (Systemically Important Financial Institution), a designation it gained following the financial crisis of 2008.
The sale to Wells Fargo in an undisclosed price includes three lines of segment—commercial distribution finance, corporate finance and vendor finance.
Vendor finance includes supplier networks for commercial goods like copiers, and machines for construction and materials handling. Corporate finance involves equipment leasing and loans based on assets to different mediocre and big firms.
Commercial distribution finance provide lending to dealers and makers of durable products, like boats, off-road cars and recreational vehicles.
GE said that roughly 3,000 staff of GE in those segments will move to Wells Fargo through the transaction, which is anticipated to be completed early next year. Credit Suisse and Goldman Sachs advised GE on the agreement.
Reports about the deal first emerged on the surface last week.
