Japan's Sumitomo Mitsui Banking Corp. is nearing a deal to buy
General Electric Co.'s European private-equity finance business,
according to people familiar with the matter, the latest step in
the industrial conglomerate's retreat from banking.
SMBC is expected to pay more than $2 billion for the unit, known
as a sponsors unit and which finances buyouts and other
transactions for private-equity firms in Europe, said the people.
They added that a deal could be announced as soon as Tuesday.
The Japanese bank prevailed over other bidders including Apollo
Global Management LLC and Ares Management LP, they said.
A spokesman at SMBC said nothing specific has been decided at
this moment.
A deal comes on the heels of GE's agreement to sell its
vehicle-fleet financing businesses in the U.S., Mexico, Australia
and New Zealand for $6.9 billion, and a separate deal for its
European fleet business, both announced Monday.
GE is shedding a large portion of its GE Capital business's $500
billion in assets. Earlier this month, it agreed to sell its U.S.
private-equity lending unit to Canada's largest pension plan in a
deal valued at $12 billion.
The sponsors deal doesn't include GE Capital's stake in its
three billion-euro ($3.4 billion) joint venture with Ares, which
also lends on private-equity deals, one of the people said.
SMBC has been keen on buying some of GE's assets, including its
Japanese finance unit and U.S. railcar leasing business, people
familiar with the matter have said.
SMBC also is no stranger to the European leveraged finance
business, entering the market in 1997, according to its website.
The bank's European unit has around $1.9 billion of outstanding
commitments, having provided loans to buyout and other
transactions, its website says.
GE's withdrawal from banking follows investors urging the
company to return to its industrial roots as market conditions and
federal regulations weighed on returns.
Atsuko Fukase contributed to this article.
Write to Gillian Tan at gillian.tan@wsj.com and Ted Mann at
ted.mann@wsj.com
Access Investor Kit for Sumitomo Mitsui Financial Group,
Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=JP3890350006
Access Investor Kit for General Electric Co.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US3696041033
Access Investor Kit for Sumitomo Mitsui Financial Group,
Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US86562M2098
Subscribe to WSJ: http://online.wsj.com?mod=djnwires