An Update on Divesture Agreements For GE Capital - Report on General Electric
NEW YORK, September 14, 2015 /PRNewswire/ --
ACI Association has initiated research coverage on General Electric Company (NYSE: GE). Select highlights from the internally released reports are being made available to the general public (included below), with access to the entirety of the research available to new members.
Today, membership is open to readers on a complementary basis at the following URL: http://www.aciassociation.com/reports?keyword=GE
Highlights from our GE Report include:
- Sale of GE Capital Assets - On August 13, 2015, General Electric Company announced that it has signed an agreement with Goldman Sachs Bank USA, (GS Bank) to sell its GE Capital Bank's U.S. online deposit platform along with all deposits of GE Capital Bank, including online savings accounts, online CDs and brokered CDs. In another release dated August 11, 2015, the Company informed that it has reached an agreement to sell $8.5 billion of GE Capital's healthcare-related loans and Healthcare Financial Services (HFS) U.S. lending business to Capital One for approximately $9 billion.
- Details of the Agreement with Goldman Sachs Bank - As per the agreement, approximately $16 billion of the Company's U.S online deposits will be transferred to GS Bank. Furthermore, the sale relates only to the deposit platform and deposits of GE Capital Bank. The Company informed that the transaction is subject to regulatory approval and includes management, employees, software, and technology used to operate the platform. Further, Commenting on the agreement, Keith Sherin, GE Capital chairman and CEO said "As we work to reduce the size and complexity of GE Capital, this transaction is another key step. It advances GE Capital's new strategic direction by facilitating closure of one of our two U.S. bank charters, which we believe will help us become less systemically important."
- Agreement with Capital One - The Company noted that the transaction, to sell $8.5 billion of GE Capital's healthcare-related loans and HFS represents about $8.4 billion of ending net investment (ENI), and post the completion, and it will contribute approximately $1.5 billion of capital to the overall target of approximately $35 billion of dividends expected to GE under this plan. Further, the Company informed that transaction is subject to customary regulatory and other approvals and is expected to close in the fourth quarter of 2015. Commenting on the transaction, Keith said, "This transaction is 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. We are on track to reduce our ENI by $100 billion by the end of 2015 and expect to be substantially done with our exit strategy by the end of 2016."
To find out how this influences our rating on General Electric Company Limited read the full report in its entirety here: http://www.aciassociation.com/reports?keyword=GE
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