GE Capital has sold its Australian and New Zealand consumer lending business to a consortium in a deal valued at US$6.3 billion. This transaction, which needs regulatory approval, will see its three million customers transferred to KKR (the lead bidder), Deutsche Bank and Varde Partners.
The GE business provides personal loans and credit cards to consumers in Australia and New Zealand, as well as interest-free financing for products sold by local retail partners including homewares and electrical-goods retailer Harvey Norman. GE Capital will keep its commercial-finance unit, which provides loans and leasing to midsize businesses in Australia and New Zealand.
Other bidders who missed out, included Apollo Global Management which was a consortium that included Macquarie Group and Pepper Australia and a syndicate headed by TPG Capital, which industry observers had viewed as the most likely winner.
GE is focusing on its industrial businesses in Australia & New Zealand.
The WSJ commented
“the sale of the Australian unit also follows a trend of global banks looking to sell down their consumer-finance businesses as they focus on core operations and free up capital. Standard Chartered PLC in December agreed to sell its consumer-finance units in Hong Kong and Shenzhen as part of its strategy to dispose of noncore businesses, as the Asia-focused lender battles with declining profits and slower growth.
Earlier this month, Citigroup Inc. agreed to sell consumer-finance unit OneMain Financial for $4.25 billion to Springleaf Holdings, as the sprawling global bank continues to pare its operations in the wake of the financial crisis.”
