General Electric is selling its commercial leasing and lending businesses, which carry more boat dealer floorplan financing than any other lender, to Wells Fargo as the conglomerate continues to shed businesses and refocus attention on its industrial core.
GE’s journey to exit the banking sector and transform itself into the world’s largest digital industrial company crossed a major milestone on Tuesday when the company said it signed an agreement to sell financial assets valued at $30 billion to Wells Fargo & Co.
The portfolio sold to Wells Fargo includes GE’s global Commercial Distribution Finance, North American Vendor Finance and Corporate Finance businesses.
“This is our largest transaction to date and a critical step in our efforts to reduce the size of GE Capital,” GE Capital chairman and CEO Keith Sherin said in a statement.
The deal is expected to close in the first quarter of next year.
The agreement comes as General Electric works to shed $200 billion worth of its financial assets under a plan announced in April. It hopes to get out from under intense regulatory pressures and relieve itself of its status as a “systematically important financial institution.”
Wells Fargo has sat across the deal-making table from GE before. The San Francisco-based bank purchased some of GE’s real estate assets in a deal with Blackstone in April, according to Forbes.
The three specialty finance businesses that Wells Fargo has agreed to purchase include a total of 3,000 employees.
In late August, Commercial Distribution Finance managing director and president Bruce Van Wagoner told Trade Only that business was proceeding as usual, despite the arm being up for sale.
“We are approaching our day-to-day work with the concept of business as usual. We feel the business has a bright future and we expect to continue to grow our relationships with a buyer who is fully committed to and invested in the financial services industry and can offer a good environment for growth,” Van Wagoner said.
“Throughout CDF’s history we have experienced numerous changes in ownership and acquisitions, not to mention some of the most challenging economic cycles of our generation. And, through those challenges, we have always emerged a stronger, more customer-focused company committed to providing the marine industry with premier customer service and custom solutions that help keep this industry strong,” he said.
“Our customers have been extremely understanding and supportive. In fact, we have recently announced a number of program extensions, including Brunswick, Bass Pro, ABA and others.”