NEW YORK (TheStreet) -- General Electric (GE) said on Monday that it has agreed to sell the bulk of its car fleet business to Canada's Element Financial and France's BNP Paribas, striking separate, but linked, deals valuing the operations at about $10 billion.
Element Financial will pay $6.9 billion for GE's U.S., Mexican, Australian and New Zealand fleet operations. The deal includes $6 billion of fleet assets, valuing the operation at about 1.15 times so-called earning assets, a ratio that Element described as "consistent with ... previous fleet management acquisitions."
BNP Paribas, acting through car-leasing unit Arval, will buy about $2.6 billion of vehicle assets. Both GE and BNP declined to put a headline price value on the sale as it is yet to be presented to local employee councils, but the transaction would be worth about $3 billion, based on the asset value multiple paid by Element.
The disposals are the latest in a spate of sales of assets owned by GE Capital, which is being wound down by its Fairfield, Conn.-based parent.
"We continue to demonstrate speed and execution on our strategy to sell most of the assets of GE Capital," GE Capital chairman and CEO Keith Sherin said in a statement. "We are on track to execute sales of $100 billion by the end of 2015 and expect to be substantially done by the end of 2016.
GE Capital Fleet Services provides commercial car and truck financing and fleet management services, with more than 1.5 million leased, serviced and managed vehicles around the world. The sales to Element and Arval will result in net gains of about $1.8 billion for GE and leave it with just its Japanese car leasing operations still on the books.