Japanese Banks Eye GE's Local Commercial Finance Operations
September 04 2015 - 5:20AM
Dow Jones News
TOKYO—Japanese megabanks were among bidders Friday for General
Electric Co.'s Japanese commercial finance operations, which are
expected to fetch several billion dollars.
Financial services group Orix Corp. and the leasing units of
Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial
Group Inc. and Sumitomo Mitsui Trust Holdings Inc. are among those
who submitted non-binding bids, according to people familiar with
the matter.
The bidders will conduct due diligence over the next several
weeks and determine the value of the operations, with the price
likely to be several billion dollars, they said.
GE is shedding the business, a key piece of GE Capital's Asia
operations, as part of efforts to slim down. GE Chief Executive
Jeff Immelt laid out plans earlier this year to sell or spin off
the bulk of the $500 billion in assets held by GE Capital. Most
recently it agreed to sell GE Capital Bank's online deposit
platform, with $16 billion in deposits, to Goldman Sachs Group Inc.
last month.
The Japanese commercial lending and leasing business has an
asset value of about $5 billion, and the amount of equity required
to make the purchase will depend on how those assets are financed,
according to one of the people.
The sale is being handled by Morgan Stanley and a final decision
on a buyer is likely to be made later this year, the people
said.
GE already sold one of its global businesses to a Japanese
player. Sumitomo Mitsui Banking Corp, the banking unit of SMFG, in
July, bought GE's European private-equity financing business for
about $2.2 billion. SMFG also expressed interest in the company's
U.S. railcar unit, according to people familiar with the
matter.
GE's commercial lending operations in Japan comprise several
divisions, including direct lending to industrial companies
purchasing big-ticket equipment such as heavy machinery. They also
offer vendor financing, helping manufacturers provide smaller
businesses with financing.
One particularly attractive business is a fleet-management
operation that helps large Japanese companies, such as trucking and
logistics operations, finance and manage ownership of trucks and
automobiles. The aviation business isn't included in the sale.
Write to Atsuko Fukase at atsuko.fukase@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
September 04, 2015 05:05 ET (09:05 GMT)
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