The cash proceeds from the sale of GE Capital, which are estimated at about $90bn, would be returned to shareholders through share buybacks, dividends as well as an exchange of Synchrony Financial shares.
GE’s latest move is expected to reshape the company and further the role of its industrial businesses as the principal source of its earnings.
The US company’s new plan is also expected to reduce its share count from 10.1 billion to 8-8.5 billion.
GE Chairman and CEO Jeff Immelt said that market conditions are favorable to pursue the sale of assets over of its financial services unit, but the company would retain the financing ‘verticals’ that are specifically tied to its industrial units.
"We are completing another definitive and important move to reshape GE for the future."
GE’s vertical financing businesses include GE Capital Aviation Services, Energy Financial Services and Healthcare Equipment Finance.
According to GE, the assets targeted for sale, also include most of the commercial lending and leasing segment, and all consumer platforms, including all US and international banking assets, which represent about $200bn in ending net investment (ENI).
GE said it has reduced the banking unit’s ENI from $538bn since 2008 to about $363bn at the end of 2014.
GE Capital focuses primarily on loans and leases and most of its commercial loans are offered to small and mid-sized companies. More than 70% of GE Capital’s loans are under $100m and its consumer lending activities are also diversified by product and geography and include operations in 55 countries.
Image: Entrance to GE Headquarters in Fairfield, Connecticut. Photo: courtesy of Markvs88
