A number of Japanese banks have made first bids for General Electric Capital’s local commercial lending and leasing business.
Sumitomo Mitsui Financial Group (SMFG), Mitsubishi UFJ Financial Group, Sumitomo Mitsui Trust Holdings and Orix Corp are among the hopefuls, reported The Wall Street Journal.
The operation and assets are estimated to be worth around $5 billion.
The sale is part of General Electric’s effort to shed roughly $200 billion in operations and assets and focus on its industrial roots. The conglomerate has sold several units in recent months and is expected to have disposed of roughly $100 billion by 2016 in its attempt to shake off its ‘too big to fail’ label.
One of the biggest sales in the pipeline is GE’s $40 billion US commercial lending and leasing business. US bank Wells Fargo is exploring a deal for that business as well as a railcar financing unit, according to reports. GE Capital’s franchise unit is also on the market.
The London-based sponsor finance unit of GE is in the process of being sold to another Japanese bank, Sumitomo Mitsui Banking Corp, a branch of SMFG, for $2.2 billion. The sale is due to finalise in the next month.
A large number of staff are expected to leave, with many eyeing jobs elsewhere, PDI understands. Reuters reported that around a third of employees will join Sumitomo Mitsui Banking Corporation Europe (SMBCE) in September.
GE Capital declined to comment.
Howard Sharp, GE Capital Europe’s head of origination and sponsor coverage for EMEA, has left for a new role and Chris Fowler, from the same team, has moved to CVC Credit Partners, as previously reported.
Another finance arm up for sale is the $1.8 billion Australian commercial lending and leasing business. Sankaty Advisors, Lone Star and HNA Group of China are all said to be final bidders for the unit.
The sale of GE’s US sponsor business, GE Antares, to Canada Pension Plan Investment Board for $12 billion has now closed, along with the US portion of GE’s vehicle fleet-management business to Canada’s Element Financial and BNP Paribas. GE is still working through the sale of the international arm of this business, PDI understands.
Goldman Sachs bought GE Capital Bank’s US online deposits worth $16 billion, while Capital One has snapped up GE’s US healthcare finance unit for $8.5 billion, as previously reported.
Wells Fargo and Blackstone kicked off the GE buying spree by acquiring units of its real estate business for $23 billion in aggregate. GE Capital plans to retain lending units that are closely aligned to its core industrial business.