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GE to Sell Transportation Finance Unit to BMO Financial Group - Strong Execution on Divestiture Plan Continues; Announced Sales Reach $85 billion - BMO.com / GE.com
GE to Sell Transportation Finance Unit to BMO Financial Group

 

NewswireToday - /newswire/ - Fairfield, CT, United States, 2015/09/10 - Strong Execution on Divestiture Plan Continues; Announced Sales Reach $85 billion - BMO.com / GE.com. NYSE: GE

   
 
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GE announced today that it has reached an agreement to sell its GE Capital, Transportation Finance business in the U.S. and Canada to BMO Financial Group (BMO).

“With the sale of our Transportation Finance business to BMO, we have again found a buyer with a customer centric culture who is committed to the industry and growing this business with the help of our tenured and experienced team,” said Keith Sherin, GE Capital chairman and CEO. “We continue to execute on our asset sales and are on track to reduce our ending net investment (ENI) by US$100 billion by the end of 2015 and expect to be substantially done with our exit strategy by the end of 2016,” he added.

GE Capital, Transportation Finance provides wholesale and commercial end-user financing to OEMs, dealers and end users for heavy and medium duty commercial trucks and trailers. BMO will retain the Transportation Finance management team and employees.

As previously announced, GE is embarking on a strategy to create a simpler, more valuable company by reducing the size of its financial businesses through the sale of most GE Capital assets and by focusing on continued investment and growth in its world-class industrial businesses. GE and its Board of Directors have determined that current market conditions are favorable to pursue these dispositions. GE will retain the financing businesses that relate directly to GE’s industrial businesses.

When completed, the transaction, which represents about US$9 billion of ENI, will contribute approximately US$0.7 billion of capital to the overall target of approximately US$35 billion of dividends expected to be paid to GE under this plan (subject to regulatory approval). With this transaction, the total for 2015 announced sales is approximately US$85 billion.

Sherin concluded,“We expect to reach sales agreements for the majority of our U.S. businesses by the end of this year and the sale of our Transportation Finance business, one of our core commercial lending and leasing businesses, gets us closer to that goal.”

The transaction is subject to customary regulatory and other approvals and is expected to close in December of 2015. Credit Suisse and Goldman Sachs provided financial advice to GE and Shearman & Sterling LLP provided legal advice.

About GE
GE (ge.com) imagines things others don’t, builds things others can’t and delivers outcomes that make the world work better. GE brings together the physical and digital worlds in ways no other company can. In its labs and factories and on the ground with customers, GE is inventing the next industrial era to move, power, build and cure the world.

Investor Contact: Matt Cribbins
P: +1 203-373-2424 - E: matthewg.cribbins[.]ge.com.

Media Contact: Seth Martin
P: +1 203-572-3567 - E: seth.martin[.]ge.com.

Caution Concerning Forward-Looking Statements:
This document contains "forward-looking statements" that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance and financial condition, and often contain words such as "expect," "anticipate," "intend," "plan," "believe," "seek," "see," "will," "would," or "target." Forward-looking statements by their nature address matters that are, to different degrees, uncertain, such as statements about our announced plan to reduce the size of our financial services businesses, including expected cash and non-cash charges associated with this plan; expected income; earnings per share; revenues; organic growth; margins; cost structure; restructuring charges; cash flows; return on capital; capital expenditures, capital allocation or capital structure; dividends; and the split between Industrial and GE Capital earnings. For us, particular uncertainties that could cause our actual results to be materially different than those expressed in our forward-looking statements include: obtaining (or the timing of obtaining) any required regulatory reviews or approvals or any other consents or approvals associated with our announced plan to reduce the size of our financial services businesses; our ability to complete incremental asset sales as part of that plan in a timely manner (or at all) and at the prices we have assumed; changes in law, economic and financial conditions, including interest and exchange rate volatility, commodity and equity prices and the value of financial assets, including the impact of these conditions on our ability to sell or the value of incremental assets to be sold as part of our announced plan to reduce the size of our financial services businesses as well as other aspects of that plan; the impact of conditions in the financial and credit markets on the availability and cost of GECC's funding, and GECC's exposure to counterparties; the impact of conditions in the housing market and unemployment rates on the level of commercial and consumer credit defaults; pending and future mortgage loan repurchase claims and other litigation claims in connection with WMC, which may affect our estimates of liability, including possible loss estimates; our ability to maintain our current credit rating and the impact on our funding costs and competitive position if we do not do so; the adequacy of our cash flows and earnings and other conditions which may affect our ability to pay our quarterly dividend at the planned level or to repurchase shares at planned levels; GECC's ability to pay dividends to GE at the planned level, which may be affected by GECC's cash flows and earnings, financial services regulation and oversight, and other factors; our ability to convert pre-order commitments/wins into orders; the price we realize on orders since commitments/wins are stated at list prices; customer actions or developments such as early aircraft retirements or reduced energy demand and other factors that may affect the level of demand and financial performance of the major industries and customers we serve; the effectiveness of our risk management framework; the impact of regulation and regulatory, investigative and legal proceedings and legal compliance risks, including the impact of financial services regulation and litigation; adverse market conditions, timing of and ability to obtain required bank regulatory approvals, or other factors relating to us or Synchrony Financial that could prevent us from completing the Synchrony Financial split-off as planned; our capital allocation plans, as such plans may change including with respect to the timing and size of share repurchases, acquisitions, joint ventures, dispositions and other strategic actions; our success in completing, including obtaining regulatory approvals for, announced transactions, such as the proposed transactions and alliances with Alstom, Appliances and our announced plan to reduce the size of our financial services businesses, and our ability to realize anticipated earnings and savings; our success in integrating acquired businesses and operating joint ventures; the impact of potential information technology or data security breaches; and the other factors that are described in "Risk Factors" in our Annual Report on Form 10-K for the year ended December 31, 2014. These or other uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements.

This document includes certain forward-looking projected financial information that is based on current estimates and forecasts. Actual results could differ materially.

 
 
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GE to Sell Transportation Finance Unit to BMO Financial Group

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GE Capital | BMO Financial Group
Publisher Contact: Susan Bishop - GE.com 
203-750-5362 susan.bishop[.]ge.com
 
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