General Electric is selling most of GE Capital as it focuses increasingly its industrial business.
GE Capital is a big money generator, but also a source of risk that made stockholders nervous.
Most of GE Capital Real Estate will be sold to funds managed by Blackstone, and Wells Fargo will buy a portion of the performing loans at closing. The company also plans to sell additional commercial real estate assets, in a deal that is valued at a total of about $26.5 billion.
The Fairfield, Conn., company will keep parts of its financing business related to its industrial operations, like GE Capital Aviation Services, Energy Financial Services and Healthcare Equipment Finance. The company says it will record about $16 billion in after-tax charges in the first quarter.
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Last year GE announced it’ll sell its Louisville, Ky.-based home appliance business to the Charlotte-based North American division of Electrolux as part of an effort to focus on selling more profitable industrial equipment. Many consumers think of GE as a maker of washers, dryers and refrigerators, but appliances accounted for only about 4 percent of the company’s 2013 revenue, as GE profited far more from segments such as airplane engines.
Wells Fargo employs roughly 23,000 in the Charlotte region, which is the San Francisco-based lender’s largest employment hub.
Observer reporter Katherine Peralta contributed.