Wells Fargo to Buy $32 Billion GE Assets, Add 3,000 WorkersDakin Campbell and Richard Clough
Wells Fargo & Co. agreed to buy $32 billion in assets from General Electric Co. and take on about 3,000 employees as the industrial giant retreats from financial services.
The sale includes commercial-distribution and vendor-finance units, and a portion of the corporate-finance business, from GE Capital, San Francisco-based Wells Fargo said Tuesday in a statement that didn’t include additional terms. The transaction is expected to be completed in the first quarter of 2016 and would allow the finance unit to return about $4.2 billion of capital to its parent, GE said in a separate statement.
Wells Fargo has been one of the biggest buyers of GE assets. In September, the lender agreed to purchase the bulk of a railcar- and locomotive-leasing unit from the company, and earlier this year, Wells Fargo said it would acquire GE real estate assets.
“This acquisition is an outstanding opportunity for Wells Fargo to deepen relationships and strengthen our presence in key commercial lending markets,” Tim Sloan, head of the wholesale banking division, said in the statement.
About 90 percent of the loan and lease portfolios are based in the U.S. or Canada, Wells Fargo said.
GE said the agreement marks its largest divestiture since it announced a plan in April to unload about $200 billion in financial assets. Chief Executive Officer Jeffrey Immelt is exiting most of the lending operations while expanding units making products such as jet engines and oilfield equipment.
GE has now sold most of its U.S. financial operations, including deals for an $8.7 billion transportation-finance division, an $8.5 billion health-care lender and an online bank with $16 billion of deposits. The one significant piece still to be sold is the franchise-finance unit, which has about $5.5 billion of assets, Keith Sherin, CEO of GE Capital, said in the statement.
“Since our April 10 announcement, we’ve signed more than $126 billion in transactions, which is over 60 percent of our overall plan,” Sherin said. GE will be mostly done with the financial overhaul by the end of next year, he said.
Goldman Sachs Group Inc. and Credit Suisse Group AG were the bankers for GE, which got legal advice from Weil Gotshal & Manges LLP. Wells Fargo Securities served as financial adviser for the acquirer and Mayer Brown offered legal advice.