GE to sell GE Capital Fleet Services
GE Chairman and CEO Jeff Immelt said the move would be made to focus GE “around its competitive advantages”.
In a statement GE said: “GE Capital has been an important part of the history of GE. However, the business model for large, wholesale-funded financial companies has changed, making it increasingly difficult to generate acceptable returns going forward.”
The company added that the exits of the targeted GE Capital businesses should release approximately $35bn in dividends to GE (subject to regulatory approval), which, under GE’s base plan, are expected to be allocated to buyback. GE said it expects that the earnings impact of the GE Capital exits will be offset by the buyback over the exit period.
The move would also see GE work closely with the Financial Stability Oversight Council (FSOC) to de-designate GE Capital as a Systemically Important Financial Institution (SIFI).
In a statement, GE Capital Fleet Services said: “ Here in the UK, GE Capital is open for business. We remain fully committed to our customers and are focused on delivering for each and every one. We anticipate being able to sell our businesses to buyers who are fully committed to and invested in the financial services industry and can offer a good environment for growth."
GE Capital added: “GE Capital is fully committed to serving customers during this period and going forward until a sale is complete. Nothing changes in our relationship with customers today. All customer agreements will remain in place. In Fleet, we have a strong franchise with talented professionals, deep customer relationships and great technology and service offerings. We are focused on continuing to deliver for customers and helping them grow and meet their goals.”