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Austria,France,United States : GENERAL ELECTRIC to sell GE MONEY BANK to a PE Fund to exit the finance sector
Publish Date : 28-Jun-2016
General Electric Co (GE) has announced its plan to offload a few of its business assets, which forms a component of a bigger plan of the industrial group to leave the finance sector. The company has said that it will sell GE Money Bank, the French consumer-credit unit of the group and has obtained a binding bid from the private equity firm Cerberus Capital Management L.P.
In April 2015, GE made an announcement on its strategy to dispose off most of its financial division GE Capital to give added concentration on its core industrial business sectors. GE Capital, at that point of time, was managing a lending business worth $500 billion. GE had revealed on its plan to maintain the financing verticals having direct relation to the industrial business areas of the group.
The latest sale, which does not cover the prime mortgage portfolio worth about $2 billion, marks end of net investment of about $4.6 billion as of the end of Q1, 2016. The platform is selling its prime mortgage portfolio in a separate deal. It is expected that the planned transaction will be accomplished within the last quarter of this year. GE Capital has signed about $177 billion worth of agreements since April 2015, including the recent deal, and of these deals, it has closed about $156 billion already.
GE Capital has strategy to sell about $200 billion of its business assets across the globe and by this year. According to the company, it is heading in the right direction to make dividend payment of almost $35 billion to GE as part of this plan, once it secures nods from the regulatory authorities.
The Chairman & CEO of GE Capital Keith Sherin disclosed, ''As we continue to execute on our strategy to sell GE Capital's businesses that aren't linked to GE, with the remainder of these transactions primarily in Europe, we're pleased to announce this agreement for the potential sale of GE Money Bank France and the DOMs to Cerberus.''
Sherin added, ''The business is well-established in consumer finance and has made a substantial contribution to GE Capital's European operations. Cerberus has a growing profile as a European financial services investor with MCS, a debt servicing business in France, and BAWAG P.S.K., a retail bank in Austria.
