GE has agreed to sell its U.S., Mexico, Australia and New Zealand fleet businesses to Element Financial Corp. in a $6.9 billion deal. The company has also signed a memorandum of understanding for the potential sale of its European fleet businesses to Arval, a fully owned subsidiary of BNP Paribas.
“We continue to demonstrate speed and execution on our strategy to sell most of the assets of GE Capital,” said Keith Sherin, GE Capital chairman and CEO. “We are on track to execute sales of $100 billion by the end of 2015 and expect to be substantially done by the end of 2016.”
GE Capital Fleet Services provides commercial car and truck financing and fleet management services, with more than 1.5 million leased, serviced and managed vehicles around the world. Element Financial is one of North America’s leading fleet management and equipment finance companies.
GE Capital sold its Canadian fleet business to Element in 2013. BNP Paribas, through its fully owned subsidiary, Arval, specializes in full service vehicle leasing in 25 countries and in 14 other countries through a network of partners, including a global alliance with Element.
“Both Element and Arval are invested in and committed to growth in the fleet industry and our customers will benefit from their strength and expertise,” said Sherin.
The sales are part of GE’s long-term strategy to focus on its industrial businesses and sell off GE Capital assets.
Both transactions represent an aggregate of about $8.6 billion of ending net investment (ENI), approximately $6 billion to Element and about $2.6 billion to Arval.
The U.S. and Mexico transaction is expected to close in the third quarter of 2015, and the Australia and New Zealand transaction in the fourth quarter of 2015, subject to regulatory approvals. If approved, the Arval transaction is targeted to close in the fourth quarter of 2015.