(GE) has agreed to sell its United States, Mexico, Australia and New Zealand fleet businesses for $6.9 billion to Canada’s Element Financial Corp.
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GE, the American multinational conglomerate, is looking to sell most of its capital assets over the next 18 months as part of a plan to grow its industrial businesses as the principal source of earnings.
The Capital Fleet Services from GE delivers auto and truck financing for commercial automobiles and fleet management services, counting above 1.5 million vehicles leased, serviced and managed internationally. Both GE and BNP declined to put a headline price value on the sale as it is yet to be presented to local employee councils, but the transaction would be worth about $3 billion, based on the asset value multiple paid by Element. The deal is the second between Element and GE in the past two years after the Canadian buyer snapped up GE’s Canadian fleet management operations for $550 million in June 2013.
“Adding these very high-quality businesses to our existing fleet operations firmly establishes Element as a leader in the North American fleet management industry”, Element CEO Steven Hudson said in a statement.
General Electric Company provides capital, expertise, and infrastructure for a global economy; building appliances, lighting, power systems and other products that may better work operations at home, offices, and factories around the world. General Electric Company (NYSE:GE)’s showed weekly performance of -0.55%.
This disposal includes a fleet of 160,000 vehicles in 12 countries, valued at €2.4 billion as of March 31.
The deals would contribute about $1.8 billion of capital to the overall target of about $35 billion of dividends expected to GE under this plan, GE said in a statement. If agreements and regulators are approved, the transaction with Arval will close at the same time. Fairfield, Connecticut-based GE will retain divisions that support manufacturing – including aircraft leasing, a boost for jet-engine production – while unloading the fleet unit and similar businesses.
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Shares (Berlin: DI6.BE – news) in Dow member GE tumbled 0.9 percent to $26.85 in opening trade amid a sharp Wall Street sell-off as Greece neared default on its debts and possibly an exit from the eurozone.
