is getting out of the trucking business.
agreed Monday to buy the New York bank's transportation finance unit in a deal that will bring Citi $4.4 billion in cash proceeds.
Under the deal, GE Commercial Finance will acquire CitiCapital's Transportation Financial Services Group, which provides financing, leasing and asset-based lending to the commercial trucking industry. Citi expects to record a $90 million gain on the transaction, which could close as soon as year-end, the companies said.
CitiCapital Transportation has 600 workers and finances 196,000 trucks and trailers for more than 49,000 customers in North America. Citi said it made the move because the trucking business didn't offer enough lucrative cross-selling opportunities.
"This transaction is another step in our effort to allocate capital most effectively throughout our businesses," said Robert B. Willumstad, president and chief operating officer of Citigroup. "Our ongoing leasing operations are core to our commercial strategy, and we look forward to leveraging the market leadership positions enjoyed by these businesses."
Meanwhile, GE expects to leverage its own strengths. "The transportation finance sector is one that we know well and have the capabilities to grow," said GE Commercial Finance chief Mike Neal. "This acquisition enhances our financing capabilities in this segment and broadens our relationships with truck manufacturers and dealers."
On Monday, Citi rose 2 cents to $45.17, and GE slipped 18 cents to $36.09.