But to achieve its goals of rapidly shrinking the lending business and finding a way out of the Fed’s oversight, the deals team needed to find a buyer for its USA commercial lending and leasing business, the division sold to Wells on Tuesday. The company has a market cap of $267.91 billion.
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“This is our largest transaction to date and a critical step in our efforts to reduce the size of GE Capital”, said GE Capital CEO Keith Sherin in a statement. The transaction was expected to close in the first quarter of next year.
The Fairfield, Connecticut-based company did not say how much Wells Fargo is paying for the assets.
One regulatory lawyer familiar with the situation noted that 2016 is likely the earliest GE Capital could be de-designated by the FSOC, largely because of the council’s lengthy process for reviewing applications. The Business supplies commercial retail as well as corporate banking services through other distribution channels and offices, the Internet as well as banking shops to associations, companies and individuals in all the District of Columbia, around 50 states and in other countries. Wells Fargo shares were down fractionally at $52.13.
Wells Fargo & Co. agreed to buy about $32 billion in assets from General Electric Co. and take on about 3,000 employees as the industrial giant retreats from financial services. Terms of the transaction were not disclosed.
Another part of the deal would see Wells Fargo, a San Francisco-based banking and financial services firm, take ownership of almost all of GE Capital Corporate Finance’s portfolio of senior secured loans and leases for middle market companies across the US and Canada.
The price Wells Fargo is paying has not been made public, according to the Wall Street Journal.
“The increased funding commitment from Wells Fargo is a clear indicator of the continued confidence in our business and the surging alternative lending industry overall”, remarked David Gilbert, founder and Chief Executive Officer, National Funding. Wells Fargo Equipment Finance is the trade name of the equipment finance businesses of Wells Fargo Bank, N.A. and its subsidiaries. When GE announced its plans in April, the company pegged a goal of $90 billion in announced sales by year’s end, then quickly raised that target to $100 billion or more.
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Shares of GE, one of the 30 stocks in the Dow Jones industrial average, were down $0.07, or 0.25 percent, to $28.02 in afternoon trading on the New York Stock Exchange.
