GE Capital Exits From Australia and New Zealand
- Nov 13, 2015
By Adriana Pop, Associate Editor
As part of its strategy to reduce the size of its financial businesses, GE has agreed to sell GE Capital’s Commercial Lending and Leasing portfolios in Australia and New Zealand to Sankaty Advisors, the global credit affiliate of Bain Capital, advised and partially financed by Deutsche Bank.
Terms of the transaction, which includes about US$1.7 billion (about A$2.4 billion) in ending net investment (ENI), were not disclosed.
Expected to close in the fourth quarter of 2015, the agreement is subject to customary closing conditions. Morgan Stanley provided financial advice and King & Wood Mallesons and Minter Ellison provided legal advice.
Upon closing, the transaction will contribute approximately US$0.1 billion of capital to the overall target of approximately US$35 billion of dividends expected to be paid to GE under the disposition plan.
The agreement marks the fourth GE Capital sale in the Australia & New Zealand (A&NZ) region this year. These transactions, which total approximately US$9 billion (A$12.6 billion) in ENI are part of GE’s strategy of focusing on continued investment in its industrial businesses. All agreements are expected to close by the end of the first quarter of 2016. GE’s plan is to retain the financing businesses that relate directly to GE’s industrial activities.
“Combined, these transactions total about US$9 billion (A$12.6 billion) of ENI, and when closed, will complete the sale of all of GE Capital’s businesses in A&NZ,” said Keith Sherin, GE Capital chairman & CEO. “Thanks to the remarkable effort of our team, we developed great customer relationships in the market. Our presence has served as an important part of GE and delivered great results for over 20 years.”
Sherin added that so far, GE has signed agreements to sell approximately US$128 billion of GE Capital, more than 60 percent of its overall plan.
Image courtesy of GE