General Electric Co. has agreed to sell its Australian commercial lending business to Sankaty Advisors, the global credit arm of Bain Capital, dismantling another key part of GE Capital in Asia.
The operation, which will be financed by Deutsche Bank,
is valued at around A $ 1.9 billion ($ 1.34 billion) including debt, according to a person familiar with the matter. It also complements GE‘s
asset sale process in Australia and New Zealand. In March, GE reached an agreement to sell its consumer lending business in Australia and New Zealand to a consortium including KKR KKR 1.31%
& Co. for an enterprise value of US $ 6.3 billion, including debt.
“We continue to make great progress in our efforts to reduce the size of GE Capital. To date, we have signed agreements to sell approximately US $ 128 billion from GE Capital, more than 60% of our overall plan, ”said Keith Sherin, President and CEO of GE Capital.
GE chief executive Jeff Immelt earlier this year outlined plans to sell or dispose of most of GE’s US $ 500 billion in global financial assets, with the goal of using the proceeds to return 50 billion US dollars to shareholders.
GE hopes investors will give the company a richer valuation if it returns to its industrial roots and generates more stable earnings without the volatility generated by GE Capital’s operations.
Last month, it agreed to sell its US commercial lending and leasing business – the remainder of its US financial services operations – to Wells Fargo & Co.
Australia’s latest deal comes as the US conglomerate is reviewing a shortlist of offers for its multi-billion dollar trade finance deals in Japan. GE has shortlisted several Japanese companies, including the leasing units of the mega-banks Sumitomo Mitsui Financial Group Inc.
and Mitsubishi UFJ Financial Group Inc.,
according to people familiar with the matter.
The Australian Commercial Lending Operation specializes in loans to medium-sized businesses, defined as those with turnover between A $ 10 million (US $ 7.9 million) and A $ 250 million. . It also offers equipment rental. Its customers include camper maker Jayco, winemaker Hardys, and Hastings Deering, a distributor of Caterpillar earthmoving equipment.
In addition to capital activities, GE has other significant businesses in Australia and New Zealand, ranging from equipment for liquefied natural gas projects to mining machinery and wind turbines.
Write to Rebecca Thurlow at [email protected]
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