Said to be the largest transaction to date, the sale forms a part of the company’s strategy to reduce the size of GE Capital, in a bid to focus on its industrial businesses.
The deal covers close to 3,000 employees and platforms of GE Capital commercial distribution finance (CDF) and GE capital vendor finance units.
CDF provides customized inventory financing to fund the flow of finished durable goods from manufacturers to dealers in six core industries including marine, recreational vehicles, motorsports, outdoor products, technology, electronics and appliances.
Vendor Finance provides private label and co-branded programs for OEMs, dealers and end users across four core industries including office imaging, construction, material handling and technology in the US and Canada.
The sale also includes GE Capital corporate finance unit’s portfolio of senior secured loans and leases for middle market companies across the US and Canada, as well as some employees.
The corporate finance business has 10 specialized equipment lending and leasing verticals, with particular expertise in food and beverage, forestry, metals, restructuring and retail.
GE Capital chairman and CEO Keith Sherin said: "Since our April 10 announcement, we’ve signed more than $126bn 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.
"Wells Fargo’s strong operations, risk and regulatory expertise, combined with their customer focus, will allow them to seamlessly integrate our businesses."
Expected to be completed in the first quarter of 2016, the sale will contribute close to $4.2bn of capital to the overall target of nearly $35bn of dividends expected to be paid to GE under the disposition plan.
Headquartered in California, Wells Fargo provides commercial and retail banking services in the US and internationally.
Image: Wells Fargo corporate headquarters in San Francisco. Photo: courtesy of Laimerpramer / Wikipedia.
