GE has completed the previously announced sale of the majority of its North American commercial lending and leasing businesses to Wells Fargo & Co. The sale to Wells Fargo includes GE Capital’s Global Commercial Distribution Finance (CDF), Vendor Finance and Corporate Finance platforms, representing ending net investment (ENI) of approximately $29 billion ($31 billion of assets). The portion that closed March 1 represents approximately $26 billion of ENI ($27 billion of assets) and does not include the sale to Wells Fargo of the CDF business outside North America which is expected to be completed later this year.
With this transaction, GE has closed $136 billion of GE Capital dispositions as it reduces the size of its financial business and transforms to a digital industrial company. The March 1 transaction releases approximately $4 billion of capital. GE Capital believes it is on track to deliver about $35 billion of dividends to GE under this plan, subject to regulatory approval.
“We are pleased to complete the sale of these businesses to Wells Fargo,” said Keith Sherin, GE Capital chairman and CEO. “This was our largest business sale to date in our effort to sell most of the assets of GE Capital. Wells Fargo has been a fantastic partner throughout the process and we are certain our customers, employees and partners will benefit from joining this industry leader.”
As previously announced, GE is focusing on its high-value industrial businesses and is selling most GE Capital assets. GE will retain the financing verticals that relate directly to GE’s industrial businesses. Since the announcement in April 2015, GE Capital has signed agreements for more than $157 billion of the $200 billion it plans to sell. In addition to the March 1 transaction, in recent weeks GE Capital has closed a variety of smaller sales globally, bringing the total amount of closed transactions to approximately $136 billion.
“We continue to execute quickly and ahead of plan on our asset sales and have worked hard to seamlessly transition our employees and customers to our buyers, a testament to the commitment of our teams,” said Sherin. “GE Capital continues to target the end of the first quarter to file an application for de-designation as a Systemically Important Financial Institution as our footprint in the U.S. has been significantly reduced. Globally, GE Capital expects to be substantially done with the sale process by the end of 2016,” he concluded.