GE Capital has agreed to purchase most of CitiCapital, Citigroup's North American commercial lending and leasing business, in an all-cash transaction.
Financial terms were not disclosed and the acquisition is expected to close, pending normal regulatory approvals, by the third quarter of this year.
According to a press release on GE's Web site, through the transaction, GE Capital will acquire seven CitiCapital equipment finance business lines, including Healthcare Finance, Private Label Equipment Finance, Material Handling Finance, Franchise Finance, Construction Equipment Finance, Bankers Leasing, and CitiCapital Canada. CitiCapital's Tax Exempt Finance business is not part of the transaction and will remain with Citi.
When completed, the deal will add approximately $13.4 billion in assets to GE Capital's Commercial Finance business. CitiCapital has approximately 1,400 employees and 160,000 customers throughout North America.
In addition, GE Capital and Citi are exploring strategic cross-sell relationships with commercial clients.
"This acquisition represents another significant growth opportunity for GE-one that helps us offer more to customers," said Mike Neal, GE vice chairman. "CitiCapital is a well established franchise with experienced employees, broad capabilities and a terrific customer base. It's a business we know how to grow. We acquired and successfully integrated CitiCapital's Transportation Financial Services Group in 2005."
The transaction is part of Citigroup's efforts to direct capital to core businesses and drive operational efficiency.
"This transaction allows Citigroup to release capital from non-core areas and redistribute that capital to areas with the greatest opportunities for profitable growth," said Peter Knitzer, chairman and CEO of Citibank North America. "This divestiture further streamlines our business and better positions the firm to leverage marketplace opportunities to benefit our shareholders."
http://www.abfjournal.com/story.asp?id=22791
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