GE Commercial Finance, the business-to-business financial services unit of the General Electric Company, has agreed to acquire most of Transamerica’s commercial finance business. The transaction will add approximately $8.5 billion in managed assets to GE Commercial Finance’s $200 billion asset portfolio.
GE Commercial Finance will acquire Transamerica units that provide distribution financing for manufacturers and dealers of industrial, consumer and recreational products as well as leasing and commercial loan financing for a wide range of sectors, including equipment, property and international structured finance. The units have approximately 1,700 employees and serve customers primarily in North America and Europe.
Under terms of the agreement, Transamerica’s parent, Aegon N.V. will receive cash proceeds of approximately $5.4 billion, including a premium on managed assets of $0.3 billion. GE will assume trade liabilities and third party debt of $0.9 billion and a securitised portfolio of $2.5 billion.
The transaction, which is subject to customary conditions and receipt of regulatory approvals, is expected to close by the end of the year.
Separately, GE Insurance it has reached a definitive agreement to sell Financial Guaranty Insurance Company (FGIC) to a group of investors led by The PMI Group, Inc for $2.16 billion.
This transaction is said to be consistent with GE Insurance’s strategy to focus its global operations on key segments, while allowing GE to selectively re-deploy capital in new business lines it intends to grow rapidly.