Today, General Electric Company (NYSE: GE) has agreed to sell off its U.S., Mexico, Australia, and New Zealand fleet businesses to Element Financial Corporation for $6.9 billion, along with the signing of a memorandum to sell its European fleet business to Arval.
The contract regarding U.S. and Mexico is expected to close in the third quarter, while Australia and New Zealand is expected to close in the fourth. If agreements and regulators are approved, the transaction with Arval will close at the same time.
General Electric Company provides capital, expertise, and infrastructure for a global economy; building appliances, lighting, power systems and other products that may better work operations at home, offices, and factories around the world. The company's fleet services accommodate commercial car and truck financing and fleet management services to over millions of consumers.
One of North America’s premier fleet administration and equipment finance companies, Element Financial, intends to back the deal from a recent C$2.7 billion acquisition along with C$5.9 billion in debt. The deal also anticipates a $90 million to $95 million in yearly cost savings and revenue gains. This will be the second deal Element Financial Corp. acquires from General Electric after the buyout of its Canadian fleet business in 2013. Along with completing the transaction with Arval, a subsidiary of BNP Paribas SA and one of Europe's leading fleet and fuel management companies, General Electric Capital's total sales would be expected to reach US$63 billion to date. By the end of the year, executive sales would track to an expected US$100 billion.
“Both Element and Arval are invested in and committed to growth in the fleet industry and our customers will benefit from their strength and expertise,” said Keith Sherin, GE Capital chairman and CEO.
With the agreement of both companies – Element and Arval – GE Capital will set to manage 3 million vehicles in 40 countries.