General Electric Signs Sale Agreement for Commercial Lending and Leasing Portfolios in Australia and New Zealand

Strategic Insights -

General Electric Company (GE) has signed a sale agreement with Sankaty Advisors, a credit affiliate of Bain Capital, for the sale of its commercial lending and leasing portfolios in Australia and New Zealand. The transaction includes about $1.7 billion in ending net investment (ENI) and is expected to contribute approximately $1 billion of capital to GE's target of $35 billion in dividends to be paid under the disposition plan. The transaction is expected to close in the fourth quarter of 2015, subject to customary closing conditions.

Key Takeaways:

  • GE signed a sale agreement with Sankaty Advisors for its commercial lending and leasing portfolios in Australia and New Zealand.
  • The transaction includes about $1.7 billion in ending net investment (ENI) and is expected to contribute approximately $1 billion of capital to GE's target of $35 billion in dividends.
  • The transaction was advised and partially financed by Deutsche Bank, and was also advised by Morgan Stanley and King & Wood Mallesons.
  • GE has signed agreements to sell four consumer and commercial financing businesses in Australia and New Zealand over the past eight months, subject to customary regulatory and closing conditions.
  • All transactions, including the one with Sankaty Advisors, are expected to close by the end of the first quarter of 2016.
  • GE's strategy is to reduce the size of its financial businesses and focus on continued investment and growth in its industrial businesses.

Statistics:

  • $1.7 billion: The amount of ending net investment included in the sale agreement with Sankaty Advisors.
  • $1 billion: The expected contribution to GE's target of $35 billion in dividends from the transaction.
  • $35 billion: The target of dividends to be paid by GE under the disposition plan.
  • $1 billion: The expected capital contribution from four consumer and commercial financing businesses sold by GE in the past eight months.

Sources:

  • "GE signs sale agreement for commercial lending and leasing portfolios in Australia and New Zealand to Sankaty Advisors" - M2 EQUITYBITES, November 9, 2015.