GE Capital has agreed to purchase most of CitiCapital, Citigroup's North American commercial lending and leasing business, in an all cash transaction.
Financial terms were not disclosed and the acquisition is expected to close, pending normal regulatory approvals, by the third quarter of 2008.
Through the proposed transaction, GE Capital will acquire seven CitiCapital equipment finance business lines, including healthcare finance, private label equipment finance, material handling finance, franchise finance, construction equipment finance, bankers leasing, and CitiCapital Canada.
CitiCapital’s tax exempt finance business is not part of the transaction and will remain with Citi.
When completed, the deal will add approximately $13.4 billion in assets to GE Capital’s commercial finance business. In addition, GE Capital and Citi are exploring strategic cross-sell relationships with commercial clients.
Citigroup said that the transaction is part of its efforts to direct capital to core businesses and drive operational efficiency.
Mike Neal, vice chairman of GE, said: This acquisition represents another significant growth opportunity for GE, one that helps us offer more to customers. It’s a business we know how to grow. We acquired and successfully integrated CitiCapital’s transportation financial services group in 2005.