GE in talks to sell specialty finance portfolio worth more than $30 bn to Wells Fargo
10 Oct 2015
US industrial conglomerate General Electric Co (GE) is in advanced talks to sell a specialty finance portfolio, worth more than $30 billion, to Wells Fargo & Co, Reuters yesterday reported, citing a person familiar with the matter.
The move comes just a few days after GE struck a deal to sell its North American corporate aircraft financing portfolio to Global Jet Capital.
Wells Fargo has so far outbid other suitors for GE's vendor financing, commercial distribution finance and direct lending assets, the report said.
A deal could be announced before Wells Fargo announces its third-quarter earnings on Wednesday, the report added.
The report said that GE Capital's commercial distribution finance offers lending to dealers and manufacturers of durable goods, such as boats, recreational vehicles and off-road vehicles. Direct lending provides asset-based loans and equipment leasing to a range of mid-size and larger companies.
Vendor finance allows larger networks of equipment dealers networks to offer third-party financing to buyers of equipment such as office imaging, construction, material handling and technology.
GE has embarked on a strategy to focus on its high-value industrial businesses and has sold most GE Capital assets, but retained the financing ''verticals'' that relate to GE's industrial businesses.
Since early this year, GE has signed agreements to sell about $97 billion of its non-core businesses, including the European Sponsor Finance deal with ENI of $2.2 billion. Other sales include $1.2 billion of loans in its UK Home Lending portfolio.
In addition, it has already sold GE Capital's Budapest Bank to the Hungarian State and GE Capital Real Estate, European private equity financing business to a unit of Japan's Sumitomo Mitsui Banking Corp (SMBC) for about $2.2 billion and a major part of its real estate portfolio to Blackstone Group and Wells Fargo for about $23 billion.
