Norwalk, Connecticut and New York, United States
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 3rd quarter of this year.
Through the 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. CitiCapital has approximately 1,400 employees and 160,000 customers throughout North America.
In addition, GE Capital and Citi are exploring strategic cross-sell relationships with commercial clients.
"This acquisition represents another significant growth opportunity for GE--one that helps us offer more to customers," said Mike Neal, GE vice chairman. "CitiCapital is a well established franchise with experienced employees, broad capabilities and a terrific customer base. It's a business we know how to grow. We acquired and successfully integrated CitiCapital's Transportation Financial Services Group in 2005."
The transaction is part of Citigroup's efforts to direct capital to core businesses and drive operational efficiency.
"This transaction allows Citigroup to release capital from non-core areas and redistribute that capital to areas with the greatest opportunities for profitable growth," said Peter Knitzer, Chairman and Chief Executive Officer of Citibank North America. "This divestiture further streamlines our business and better positions the firm to leverage marketplace opportunities to benefit our shareholders."
Citi's Institutional Clients Group advised Citi in the transaction.
About GE Capital
GE Capital offers consumers and businesses around the globe an array of financial products and services. Its Commercial Finance unit has assets of approximately $335 billion and is headquartered in Norwalk, Connecticut. GE (NYSE: GE) is Imagination at Work - a diversified technology, media and financial services company focused on solving some of the world's toughest problems. GE serves customers in more than 100 countries and employs more than 300,000 people worldwide. For more information, visit www.ge.com.
About Citi
Citi, the leading global financial services company, has some 200 million customer accounts and does business in more than 100 countries, providing consumers, corporations, governments and institutions with a broad range of financial products and services, including consumer banking and credit, corporate and investment banking, securities brokerage, and wealth management. Citi's major brand names include Citibank, CitiFinancial, Primerica, Smith Barney, Banamex, and Nikko. Additional information may be found at www.citigroup.com or www.citi.com.
Source: Business Wire (Business Wire India)