General Electric sells European unit to Sumitomo Mitsui Banking

Infrastructure and financial services company General Electric has reached an agreement to sell its European private-equity finance business to Japan's Sumitomo Mitsui Banking Corp. for approximately $2.2bn.

The Connecticut-headquartered group said it expects the deal to be completed in the third quarter of the year, adding it will retain investment in the European Senior Secured Loan Programme and European Loan Programme.

According to sources cited by a report from The Wall Street Journal, the Japanese lender was chosen ahead of other bidders, including Apollo Global Management LLC and Ares Management LP.

On Monday, General Electric announced a deal to sell its vehicle-fleet financing divisions in the US, Australia, New Zealand and Mexico for $6.9bn, as the firm looks to step away from the banking sector.

The New York-listed group is in the process of divesting a large part of its GE Capital business, whose assets amount to approximately $500bn.

In June, General Electric completed the sale of its US private equity lending unit to Canada’s largest pension plan for $12bn.

General Electric shares were up 0.30% to $26.72 at 16:09 on Tuesday.