General Electric sells European unit to Sumitomo for $2.2 billion

Company is refocusing on industrial businesses

Jeffrey Immelt, chairman and chief executive officer of General Electric. the company is focusing on industrial businesses. Photograph: Pete Marovich/Bloomberg
Jeffrey Immelt, chairman and chief executive officer of General Electric. the company is focusing on industrial businesses. Photograph: Pete Marovich/Bloomberg

General Electric is to sell its European buyout-lending unit to Sumitomo Mitsui Financial Group for $2.2 billion.

This adds to its disposal of finance operations to focus on industrial businesses.

The transaction is expected to be completed in the third quarter, the company said in a statement on Tuesday.

Chief executive officer Jeffrey Immelt is refocusing on industrial operations, making products such as jet engines, gas turbines and medical scanners.

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Japanese banks are looking abroad for growth as a declining population and shrinking loan margins hamper profit prospects in the world’s third-largest economy.

The sale extends GE’s retreat from lending to private-equity firms after a $12 billion deal on June 9 th to sell most of the US business to Canada Pension Plan Investment Board.

GE said in May it expected to announce as much as $30 billion of financial-asset sales by June 30th as it works toward a $200 billion goal.

The European private-equity unit, which lines up financing for buyout firms, had been one of GE Capital’s top sale priorities, along with the US division and the health-care lending business, GE Capital CEO Keith Sherin said .

The company agreed to sell the bulk of its vehicle fleet-management business to Canada’s Element Financial for $6.9 billion, according to a statement on Monday.

- Bloomberg