GE to Offload Majority of Global Fleet Business


GE has reached an agreement to sell its U.S., Mexico, Australia and New Zealand fleet businesses to Element Financial Corp. for $6.9 billion. Separately, GE has signed a memorandum of understanding for the potential sale of its European fleet businesses to Arval, a fully owned subsidiary of BNP Paribas. Arval and GE will now consult with their respective works councils. The transactions' completion will also be subject to customary regulatory and other local corporate or antitrust approvals.

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. 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. Excluded from the transactions is GE Capital's fleet business in Japan.

As previously announced, GE says it is embarking on a strategy to focus on its high-value industrial businesses and is selling most GE Capital assets. GE and its board of directors have determined that market conditions are favorable to pursue disposition of these assets over the next 18 months.

‘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,” says Keith Sherin, GE Capital chairman and CEO.

GE expects to close all of the transactions, if approved, by year's end. J.P. Morgan Securities LLC provided financial advice to GE, and Weil, Gotshal & Manges LLP provided legal advice.

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