Banking

Wells Fargo to buy $32B in GE assets, add 3,000 workers

Wells Fargo & Co. agreed to buy about $32 billion in assets from General Electric Co. and take on about 3,000 employees.
Wells Fargo & Co. agreed to buy about $32 billion in assets from General Electric Co. and take on about 3,000 employees. Bloomberg

Wells Fargo & Co. agreed to buy about $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, vendor and corporate finance units 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 GE’s finance unit to return about $4.2 billion of capital to its parent, GE said in a separate statement.

With the purchase, Wells Fargo would become 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 Wells Fargo’s 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.

Wells Fargo shares fell .61 percent to $51.86, while GE shares fell .78 percent to $27.87.

Wells’ GE purchases highlight the bank’s willingness to make deals, even as rivals such as Charlotte-based Bank of America and New York-based Citigroup have been selling off assets and business units to streamline operations. Wells acquired Charlotte’s Wachovia during the financial crisis in 2008 and emerged in better financial shape than most of its peers. It has its largest employee hub in Charlotte.

At the end of June, Wells Fargo had $1.7 trillion in assets, the fourth-most of U.S. banks, and 266,000 employees, the most of U.S. banks.

GE said this spring it would sell most of the assets in its GE Capital financial services subsidiary, part of an effort by CEO Jeffrey Immelt to transform the company into a more focused industrial conglomerate that makes large, complicated equipment for other businesses.

Staff writer Rick Rothacker contributed.

Bank earnings

Bank of America and Wells Fargo report their third-quarter earnings Wednesday morning. For updates, check charlotteobserver.com.

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