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The deal, which includes the sale of healthcare-related loans
worth $8.5 billion, brings GE one step closer to achieving its
target of shedding about $100 billion worth of finance assets by
the end of this year.
The latest sale, expected to close in the fourth quarter, will
take GE's announced divestitures of finance assets to about $78
billion.
Reuters reported last week that Capital One was in exclusive
talks to acquire GE's healthcare finance unit and that it had
outbid other potential buyers in an auction for the unit.
The size of GE's finance arm — GE Capital — and the potential
risk stemming from its lending portfolio has made it subject to
government oversight. GE plans to apply next year to escape its
designation as a systemically important financial institution
following the sale of finance assets.
For Capital One, the deal will bolster its healthcare lending
operations.
"This addition will catapult us to a leading market position in
providing financial services to the healthcare sector," said
Michael Slocum, president of Capital One's Commercial Bank.
GE's healthcare finance unit offers direct loans to healthcare
product and services companies as well as real estate loans to
operators of assisted living facilities, nursing homes and
medical practices.
GE also said on Tuesday it agreed to sell about $600 million of
the unit's real estate equity investments to another buyer,
which it did not name.
In April, GE agreed to sell about $26 billion of real estate
assets to Wells Fargo & Co <WFC.N> and Blackstone Group LP <BX.N>.
Subsequently, GE agreed to sell its private equity lending
portfolio to Canada Pension Plan Investment Board for $12
billion.
Citigroup Global Markets and J.P. Morgan Securities LLC advised
GE and Hogan Lovells US LLP was the legal adviser.
Credit Suisse and Wells Fargo Securities were financial advisers
to Capital One and Wachtell, Lipton, Rosen & Katz was the legal
adviser.
Capital One's shares were up marginally at $81.43 in extended
trading on Tuesday. GE's stock also rose slightly to $25.80.
(Editing by Saumyadeb Chakrabarty)
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