May/June 2015

FinalCut: GE to Sell Most of GE Capital Assets By 2018

ABF Journal illustrator Jerry Gonzalez provides his take on GE announcing it would 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.



May/June 2015 FinalCut

May/June 2015 FinalCut

GE announced it would 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.

“This is a major step in our strategy to focus GE around its competitive advantages,” GE Chairman and CEO Jeff Immelt said. “GE today is a premier industrial and technology company with businesses in essential infrastructure industries. These businesses are leaders in technology, the industrial Internet and advanced manufacturing. They are well-positioned in growth markets and are delivering superior customer outcomes, while achieving higher margins. They will be paired with a smaller GE Capital, whose businesses are aligned with GE’s industrial growth.”

GE was expected to retain its “vertical” financing businesses — GE Capital Aviation Services, Energy Financial Services and Healthcare Equipment Finance — that directly relate to its core industrial businesses. Examples of financial businesses that would be phased out or sold included: equipment leasing and financing, fleet services, franchise financing, inventory financing, M&A and buyout financing, and commercial real estate financing. In effect, GE Capital was expected to look like a captive by 2018.

GE Capital total segment assets at the end of Q1/15 were $476.5 billion. Most of the balance, or $413.5 billion, excluding Healthcare Financial Services, was expected to be sold off or phased out over the subsequent 24 months.