General Electronic Co. has announced that it is selling its healthcare finance unit based in U.S. to the credit card lender company Capital One Financial Corp., in a deal that is worth nearly US$9 billion. The deal comes as General Electronics winds up its presence in the finance sector and makes its move to the industrial roots.
The deal, which includes the sale of General Electronic Co.’s nearly US$8.5 billion worth of healthcare related loans, makes GE near one more step to achieving its target of releasing nearly US$100 billion worth of assets in the finance sector by the end of this year.
This latest buyout, which is expected to be completed in the fourth quarter of this year, will make GE’s announced sales of finance assets to nearly US$78 billion.
Only last week, it was being said that Capital One was in talks regarding the acquisition of GE’s healthcare finance division and that it overcame the proposals made by other potential buyers in an auction held for the buyout process by outbidding all of them.
The deal will help Capital One in bolstering its lending operations in the healthcare field. For GE, the finance arm – GE Capital – had become subject to government oversight due to the risks stemming from its lending portfolio.
In the next year, GE plans to escape it designation as a systematic financial institution by selling its finance assets.
Michael Slocum, Capital One Commercial Bank’s President, said that the addition will help Capital one in reaching a leading position in the field of healthcare financial services.
The healthcare finance unit of GE is a leader in offering loans to healthcare service and product companies as well as real estate loans to companies in the field of medical practices, nursing homes, and assisted living.