NEW YORK (TheStreet) -- General Electric (GE) made another leap forward in CEO Jeff Immelt's plan to spin off most of the finance unit on Monday with an agreement to sell a large portion of its fleet-financing business to Element Financial (ELEEF) for for $6.9 billion
With the latest deal, which includes GE's fleet operations in the U.S., Mexico, Australia and New Zealand, and a tentative agreement to sell its European fleet business to Arval, a subsidiary of BNP Paribas (BNPQY), GE has reached about $63 billion in sales of financing assets since announcing the plan in April. The Fairfield, Conn.-based company is now more than halfway toward its roughly $100 billion target for this year.
Pending regulatory approvals, GE expects the U.S. and Mexico transactions to close in the third quarter, and the Australia and New Zealand deals in the fourth quarter. The Arval sale would close at the same time if agreements are completed and regulators approve, GE said.
"This announcement is the next step in GE's transformation to a more focused industrial company," Keith Sherin, the head of GE Capital, said in a statement. "Both Element and Arval are invested in and committed to growth in the fleet industry, and our customers will benefit from their strength and expertise."
Selling most of the finance unit, which had become the company's single largest business by both sales and profit, will enable Immelt to return the company to its manufacturing roots and escape stricter regulatory requirements imposed when the Treasury designated GE Capital as a non-bank systemically important financial institution. The SIFI label is intended to provide additional safeguards against a financial crisis like the one in 2008 and 2009 when heightened risk at GE Capital cost the parent company its top credit rating and forced Immelt to cut GE's dividend.