GE Announces Fleet Sales Deals With Element, Arval
GE announced an agreement to sell its fleet business in the U.S. and other countries to Element Financial Corp. for $6.9 billion as the seller exits the trucking business to focus on other industrial sectors.
The sale to Canada-based Element also includes fleet businesses in Mexico, Australia and New Zealand. In addition, GE Capital said it’s signed a memorandum of understanding to sell its European fleet units to Arval, a unit of BNP Paribas, without disclosing specific terms.
“This announcement is the next step in GE’s transformation to a more focused industrial company,” said Keith Sherin, GE Capital’s CEO in a statement.
GE Capital, which officially announced plans to sell its fleet assets two months ago, offers truck financing, as well as equipment management and commercial car loan services covering more than 1.5 million vehicles worldwide.
“Adding these very high quality businesses to our existing fleet operations firmly establishes Element as a leader in the North American fleet management industry,” said Steven Hudson, CEO of Element that also provides rail and aviation financing. Arval specializes in vehicle leasing.
GE plans to retain financing for other industries, including rail locomotives manufacturing. Announced GE Capital unit sales now total $63 billion, with a total of $100 billion expected by year-end.
The buyer and seller in Europe said the next step in that transaction is to begin consulting with groups that represent workers there.
Sale completion is expected for the U.S. and Mexico units during the third quarter, and the Element sales in Australia and New Zealand are expected to follow one quarter later. Fourth-quarter closing of the Arval sale in Europe is planned. The GE assets in Japan are excluded from both transactions.
The sales also are subject to regulatory reviews in multiple countries.
The Canadian fleet business of GE Capital was sold to Element two years ago.
