explores sale of GE Money Bank Nordics: sources
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[April 01, 2014]
By Anjuli Davies and Sven Nordenstam
LONDON / STOCKHOLM (Reuters) — U.S.
conglomerate General Electric Co <GE.N> is exploring the sale of its
GE Money Bank unit in the Nordic region, which could fetch up to 2
billion euros ($2.75 billion), as it retreats from the finance
sector, sources close to the matter told Reuters.
GE Money Bank, established in the Nordic market in 1993, is part of
General Electric's finance arm GE Capital, which is working with
Bank of America Merrill Lynch <BAC.N> to review its options, three
Both GE and Bank of America declined to comment.
GE is seeking to reduce its exposure to the volatile banking sector,
which hurt the company during the 2008 financial crisis.
Potential buyers for GE Money Bank Nordics include private equity
firms as well as strategic players with a consumer finance presence
in the region, the sources said.
GE Money Bank Nordics employs 800 people with a presence in Denmark,
Norway and Sweden. It is active in loans and credits, credit cards,
deposits and insurance.
GE is aiming to increase its earnings mix to at least 70 percent
from its industrial manufacturing businesses by 2016, up from about
55 percent last year, which would reduce the profit contribution
from its GE Capital business to about 30 percent.
Earlier this month, GE's North American credit card unit filed for
an initial public offering, the first step in GE's previously
disclosed plan to exit retail finance in the region. The credit card
unit, to be known as Synchrony Financial, could be worth more than
$20 billion, according to analysts.
The conglomerate has already sold its consumer credit business in
Austria and Germany to Spanish bank Santander <SAN.MC> and floated
its Swiss consumer lending business, renamed Cembra Money Bank <CMBN.S>.
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Bank of America also acted as joint bookrunner on the Cembra
flotation in October.
The smaller GE Capital that remains will focus on lending in sectors
that complement GE's industrial businesses, such as aviation and
energy, as well as to middle-market businesses and in commercial
GE shares slipped 5 cents to $25.83 in Monday afternoon trading on
the New York Stock Exchange. The stock, which is among the 30 in the
Dow Jones industrial average, has dropped more than 7 percent this
year, underperforming the broader U.S. market.
($1 = 0.7258 euros)
(Additional reporting by Arno Schuetze in Frankfurt and Lewis
Krauskopf in New York; editing by Mark Potter and Jan Paschal)
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