GE Sells Office-Equipment Financing Group to Wells Fargo
GE has sold GE Capital’s global Commercial Distribution Finance, North American Vendor Finance and Corporate Finance platforms to Wells Fargo & Co. The sale includes an investment of approximately $30 billion (about $32 billion of assets) and approximately 3,000 employees, and will close in the first quarter of 2016.
GE’s Commercial Distribution Finance (CDF) provides financing from manufacturers to dealers in industries such as recreational vehicles, motor sports, outdoor products, technology, electronics and appliances, and serves customers in 60 countries. CDF’s Vendor Finance is a provider of private label and co-branded programs for OEMs, dealers, and end users across four core industries in the United States and Canada: office imaging, construction, material handling, and technology.
“This is our largest transaction to date and a critical step in our efforts to reduce the size of GE Capital,” commented Keith Sherin, GE Capital chairman and CEO. “Since our April 10 announcement, we’ve signed more than $126 billion in transactions, which is over 60 percent of our overall plan, and are on track to become less than 10 percent of GE’s earnings as the company transitions to a more focused digital industrial company.”
The transaction includes the management, employees, and platforms of GE Capital Commercial Distribution Finance (CDF) and GE Capital Vendor Finance.
The transaction also includes essentially all of GE Capital Corporate Finance’s portfolio of senior secured loans and leases for middle-market companies across the United States and Canada, as well as some employees. Corporate finance has 10 specialized equipment lending and leasing verticals, with particular expertise in food and beverage, forestry, metals, restructuring, and retail.
When completed, the transaction will contribute approximately $4.2 billion of capital to the overall target of approximately $35 billion of dividends expected to be paid to GE under the disposition plan.
As previously announced, GE is striving to create a simpler, more valuable company by reducing the size of its financial businesses through the sale of most GE Capital assets and by focusing on continued investment and growth in its industrial businesses. GE will retain the financing businesses that relate directly to GE’s industrial businesses.
The transaction with Wells Fargo is subject to customary closing conditions.