- Additional Progress Made on Sale of GE
Capital Businesses Globally
- Announced sales reach approximately $95
billion
- Aligns with GE’s Strategy to Create
Simpler, More Valuable Digital Industrial Company
GE (NYSE:GE) announced today that it has reached separate
agreements to sell its tank car fleet assets and railcar repair
facilities to Marmon Holdings, Inc., and its remaining railcar
leasing business, General Electric Railcar Services LLC, to Wells
Fargo & Co. (NYSE:WFC). Terms of the transactions are not being
disclosed.
“These transactions are another example of the value generated
by GE Capital’s strong businesses and exceptional teams as we
continue to demonstrate speed and execute on our strategy to sell
most of the assets of GE Capital,” said Keith Sherin, GE Capital
chairman and CEO. “We expect to be substantially done with our exit
strategy by the end of 2016,” he added.
GE Railcar Services leases a broad range of railcars as well as
locomotives to shippers and railroads across North America.
“We’re pleased to sell our railcar business and, separately, our
tank car fleet and railcar repair shops, to buyers that are
long-term players in the industry committed to expanding the
businesses,” said Sherin.
As previously announced, GE is embarking on a strategy to focus
on its high-value industrial businesses and is selling most GE
Capital assets. GE and its Board of Directors have determined that
market conditions are favorable to pursue disposition of these
assets. GE Capital will retain the financing “verticals” that
relate to GE’s industrial businesses.
The sale of the tank car assets is effective immediately and
closed today. The sale of the railcar repair facilities is expected
to close in the fourth quarter of 2015. The sale of the remaining
railcar leasing business is subject to customary regulatory and
other approvals and is expected to close by the end of the first
quarter of 2016.
When completed, the Rail transactions, which represent about
$4.0 billion of ending net investment , will contribute
approximately $1.3 billion of capital to the overall target of
approximately $35 billion of dividends expected to GE under this
plan (subject to regulatory approval).
Deutsche Bank Securities Inc. provided financial advice to GE
and Weil, Gotshal & Manges LLP provided legal advice.
Other GE Capital Divestiture Updates
Earlier today, Mubadala GE Capital Ltd, a joint venture between
GE Capital and Mubadala Development Company, announced the sale of
substantially all of its assets ($3.6 billion of assets; $1.5
billion of GE Capital ending net investment) to MidCap Finco Ltd
(MidCap). MidCap is managed by Apollo Capital Management, L.P., a
subsidiary of Apollo Global Management, LLC. The transaction will
contribute approximately $0.7 billion of capital to the overall
target of approximately $35 billion of dividends expected to GE
under this plan (subject to regulatory approval). It is expected to
close in the fourth quarter of 2015.
Additionally, today GE completed the previously announced sale
of its Mexican, Australian, and New Zealand fleet businesses,
representing aggregate ending net investment (ENI) of approximately
$1.7 billion, to Element Financial Corporation
(TSX:EFN). Element acquired GE’s U.S. fleet services business
in August. The completion of the sale of GE’s European fleet
businesses to Arval, a fully owned subsidiary of BNP Paribas, is
expected to close in the fourth quarter.
With signing of the Rail and Mubadala transactions, the total
for announced sales year-to-date is approximately $95 billion.
Sherin concluded, “We are extremely pleased with the progress we
have made thus far with the sales of our businesses and GE’s
transformation to a more focused digital industrial company.”
About GE
GE (NYSE: GE) is the world’s Digital Industrial
Company, transforming industry with software-defined
machines and solutions that are connected, responsive and
predictive. GE is organized around a global exchange of
knowledge, the "GE Store," through which each business shares and
accesses the same technology, markets, structure and intellect.
Each invention further fuels innovation and application across our
industrial sectors. With people, services, technology and scale, GE
delivers better outcomes for customers by speaking the language of
industry. www.ge.com
GE’s Investor Relations website at www.ge.com/investor and our
corporate blog at www.gereports.com, as well as GE’s Facebook page
and Twitter accounts, including @GE_Reports, contain a significant
amount of information about GE, including financial and other
information for investors. GE encourages investors to visit these
websites from time to time, as information is updated and new
information is posted.
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
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announced plan to reduce the size of our financial services
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with this plan; expected income; earnings per share; revenues;
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cash flows; return on capital; capital expenditures, capital
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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
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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
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volatility, commodity and equity prices and the value of financial
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oversight, and other factors; our ability to convert pre-order
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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
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serve; the effectiveness of our risk management framework; the
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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
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savings; our success in integrating acquired businesses and
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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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version on businesswire.com: http://www.businesswire.com/news/home/20150930006882/en/
Investor:Matt Cribbins, +1
203-373-2424matthewg.cribbins@ge.comorMedia:GE
Capital:Susan Bishop, +1
203-750-5362susan.bishop@ge.comorGE:Seth Martin, +1
203-572-3567seth.martin@ge.com
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