GE Capital’s Australia and New Zealand Consumer Lending Business will be purchased at an enterprise value of A$8.2bn (€5.96bn).
Advisers to GE are Credit Suisse Group and Morgan Stanley. Advisers to the acquiring consortium are Bank of America Merrill Lynch, Citigroup, and Moelis & Co.
“This partnership will provide a platform for growth in the dynamic consumer finance market,” George Hicks, co-CEO of Värde Partners said in a statement. “It is a natural extension of our deep expertise in specialty consumer finance and a great fit for us.”
The unit, which provides GE-branded credit cards and personal loans, has about A$7bn of gross assets, sources said in December. It has about 100 branches and operates store cards for Wesfarmers’ Coles supermarkets and Myer Holdings.
“GE has a strong platform for growth in our industrial businesses in Australia and New Zealand,” said Geoff Culbert, president and CEO of GE Australia & New Zealand. This transaction allows us to focus on our strategy to be the world’s premier infrastructure technology company with a specialty commercial financial services business. We will continue to work with our customers in key industries including oil and gas, energy, healthcare, aviation and mining.”
GE has been shrinking GE Capital after the financial services arm threatened to drag down the group during the 2008-2009 credit crisis.
In July, GE sold a stake in its North American consumer-lending business Synchrony Financial in an initial public offering that valued the unit at $19bn. (€18bn). It also spun off a majority holding in its Swiss consumer finance company Cembra Money Bank in October. Spain’s Banco Santander agreed in June to buy GE’s consumer finance unit in Sweden, Denmark, and Norway for €700m.
“We are delighted to be part of one of the largest private equity transactions ever in Australia and New Zealand,” Ali Haroon, Värde Partners’ lead partner in the Asia Pacific Region, said. “This investment demonstrates Värde’s continued commitment to our Asia-Pacific business.”