Continuing its retreat from banking, General Electric announced Monday it had agreed to sell its fleet-financing businesses in the United States, Mexico, Australia, and New Zealand to Element Financial Corp. of Canada for $6.9 billion.
As The New York Times reported, the company has been pursuing sales of a variety of assets in its GE Capital finance arm as it refocuses on its industrial roots. It also said Monday that it had signed a memorandum of understanding for the potential sale of its European fleet businesses to Arval, a unit of the French bank BNP Paribas and an alliance partner of Element’s.
“We continue to demonstrate speed and execution on our strategy to sell most of the assets of GE Capital,” Keith Sherin, chairman and chief executive of GE Capital, said in a news release. “We are on track to execute sales of $100 billion by the end of 2015 and expect to be substantially done by the end of 2016.”
GE Capital Fleet Services provides car and truck financing for commercial vehicles and fleet management services, including more than 1.5 million vehicles leased, serviced and managed worldwide.
“Adding these very high quality businesses to our existing fleet operations firmly establishes Element as a leader in the North American fleet management industry,” Steven Hudson, the chief executive of Element, said in a news release.
GE said it had determined that market conditions are favorable to pursue disposition of other GE Capital assets over the next 18 months. The company will retain the financing “verticals” that relate to its industrial businesses, it said.
Element acquired GE’s Canadian fleet business in 2013. The latest deal “is the next step in GE’s transformation to a more focused industrial company,” GE said.
The sale of the U.S. and Mexico business is expected to close in the third quarter, and the Australia and New Zealand transaction is expected to close in the fourth quarter. G.E. said that it aimed to close the Arval sale in the fourth quarter, if the deal goes ahead.