GE unit to buy CitiCapital
General Electric Co. reached a deal to buy Citigroup Inc.’s commercial lending and leasing business - CitiCapital - for an undisclosed price, the companies said Thursday.
General Electric’s GE Capital division is buying seven lending units from Citi: healthcare, private-label equipment, material-handling, franchise, construction equipment, bankers leasing and the Canadian division.
The acquired businesses have $13.4 billion in assets, 160,000 customers in North America and 1,400 workers.
Citi (C, Fortune 500) said the deal is part of the company’s plan to jettison "non-core" businesses to focus on the most profitable opportunities.
After losing nearly $10 billion in the fourth quarter, Citi embarked on a plan to raise cash by selling stock and bonds, cutting its dividend and selling some of its businesses.
The bank has sold stakes in Redecart and Simplex Investment Advisors, and cut some investments from its portfolio fast cash advance. The company’s assets shrank by $176 billion in the fourth quarter.
GE (GE, Fortune 500) called the CitiCapital deal a "significant growth opportunity."
"It’s a business we know how to grow," Mike Neal, chief executive of GE Commercial Finance, said in a statement.
CitiCapital’s tax-exempt finance business is not part of the deal.
The companies expect the acquisition to be completed by the third quarter.
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