• Buyout firms said to have bid two weeks ago for lender
  • Unit is among four said to have been considered for group sale

KKR & Co. and Apollo Global Management are seeking to acquire General Electric Co.’s inventory finance arm, a unit with $11 billion in assets, as the company retreats from banking, people familiar with the matter said.

The buyout firms made bids two weeks ago for GE Capital Commercial Distribution Finance, said the people, who asked not to be identified because the negotiations are private. GE could select a buyer by the end of the month for the unit, which arranges credit for retailers and manufacturers, the people said.

The business is among a batch of four commercial lenders with a combined $40 billion in assets that GE began auctioning in June as part of Chief Executive Officer Jeffrey Immelt’s effort to refocus on manufacturing. One of those operations, GE’s transportation finance division, was sold Thursday to Bank of Montreal.

GE had been exploring selling the group to a single buyer, the people said. The remaining three divisions -- inventory finance, an equipment-leasing arm and a lender to mid-size companies -- could still be sold together. Each has $8 billion to $12 billion in assets.

A spokesman for GE declined to comment, as did a representative of KKR. Apollo didn’t respond to a message seeking comment.

GE Capital Commercial Distribution Finance provides funding to help move products such as boats, electronics and furniture from manufacturers to dealers.

Immelt’s planned divestiture of $200 billion of GE Capital assets could remove GE from U.S. regulation as a financial company so large that its failure would threaten the economy. Fairfield, Connecticut-based GE also wants to emphasize a manufacturing lineup that includes gas turbines and oilfield equipment.

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