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BUYOUT UNIT TO BE SOLD BY GE FOR $12 BILLION

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BUYOUT UNIT TO BE SOLD BY GE FOR $12 BILLION

June 10 2015, 07.40am GMT

STOCK.com

General Electric Co. (GE, +0.29%) is taking all the right steps in their retreat from the banking sector. On Tuesday, the industrial giant agreed to sell its private equity lending unit to the largest pension fund in Canada.

This deal has been valued at approximately $12 billion.

According to a report by The Wall Street Journal, the companies involved should reach a final deal this week.

Meanwhile, General Electric stated that they are selling a bank loan portfolio to the Canada Pension Plan Investment Board which is valued at $3 billion. The company also announced that they would sell Antares Capital, their private equity lending business as well as their sponsor finance business. Antares Capital will operate as a stand-alone business and will maintain its name.

General Electric is working hard to sell off the remaining portions of its $500 GE Capital unit and this recent deal is clearly a step in the right direction.

For many years, investors have been urging the company to get out of the banking business since market conditions as well as federal regulations have negatively impacted the unit’s returns. Based on this, General Electric is now taking the necessary steps to go back to their grassroots and to focus rather on what they are good at doing.

The latest deal has enabled GE to unveil $55 billion worth of asset sales. This has now put the company on track to reach its $100 billion goal in sales by the end of 2015.

Added to this, this deal should conclude in the 3rd quarter of 2015 and it marks one of the biggest financial takeovers since the crisis of 2008.

MT4 Chart: General Electric

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