1:32 pm Updated with comment from Marine Group president Bruce Van Wagoner
GE will sell a $30 billion piece of its commercial lending operations, including Commercial Distribution Finance, to Wells Fargo.
GE Capital CDF is the largest provider of floorplan financing in the marine industry.
"We're very excited to be joining Wells Fargo, a respected industry leader who is committed to helping our customers grow, both in North America and around the globe. We couldn’t ask for a better outcome for our team and our customers. We look forward to continuing to offer our customers premier customer service and solutions that help keep the marine industry strong and accelerate product growth. We anticipate closing by 1Q 2016. ” Bruce Van Wagoner, President CDF Marine Group, said in an email to Boating Industry.
The deal is part of GE's plan, announced in April, to mostly exit the financial services business.
The transaction includes the leadership, employees and platforms of GE Capital Commercial Distribution Finance (CDF) and GE Capital Vendor Finance, the company said. The groups employ approximately 3,000 people.
“This is our largest transaction to date and a critical step in our efforts to reduce the size of GE Capital,” Keith Sherin, GE Capital chairman and CEO said in a statement. “Since our April 10 announcement, we’ve signed more than $126 billion in transactions, which is over 60 percent of our overall plan, and are on track to become less than 10 percent of GE’s earnings as the company transitions to a more focused digital industrial company.
“We’re very pleased to sell this significant piece of our business to Wells Fargo, a respected industry leader who is committed to helping our customers grow and succeed. Wells Fargo’s strong operations, risk and regulatory expertise, combined with their customer focus, will allow them to seamlessly integrate our businesses,” Sherin added.
The transaction also includes essentially all of GE Capital Corporate Finance’s portfolio of senior secured loans and leases for middle market companies across the U.S. and Canada, as well as some employees. Corporate Finance has 10 specialized equipment lending and leasing verticals, with particular expertise in food and beverage, forestry, metals, restructuring and retail.
When completed, the transaction will contribute approximately $4.2 billion of capital to the overall target of approximately $35 billion of dividends expected to be paid to GE under the disposition plan (subject to regulatory approval). With this transaction, the total ENI for 2015 announced sales is more than $126 billion.
“We continue to execute quickly on our asset sales. With this transaction, GE Capital has only one significant platform remaining for sale in the U.S., our Franchise Finance unit with $5.5 billion of ENI. Once the U.S. transactions have closed and the split off of GE Capital’s retail finance business, Synchrony Financial, has occurred, GE Capital expects to file an application in 2016 for de-designation as a Systemically Important Financial Institution as its footprint in the U.S. will be significantly reduced. Globally, GE Capital expects to be substantially done with its exit strategy by the end of 2016,” said Sherin.