General Electric Co said on Monday it will buy part of Bombardier Inc's financing division for $1.4 billion, the latest acquisition by GE's highly profitable commercial finance unit. GE Commercial Finance, the business-to-business financing unit for the industrial, media and finance giant, will also assume $1 billion in debt and other liabilities related to the $2.2 billion business, Bombardier Capital's inventory finance division.
The commercial financing arm is GE's largest unit and works closely with GE's industrial businesses to provide financing for big-ticket items such as medical diagnostic equipment, power systems and jet engines.
The Bombardier unit, based in Vermont, provides financing for recreational products and vehicles, boats and manufactured housing. It employs 280 people.
The deal, which is expected to close as early as the second quarter, follows GE Commercial Finance's $4.4 billion acquisition of Citigroups's truck leasing unit in November and TransAmerica commercial lending business of Dutch insurer Aegon NV for more than $5 billion. Net cash proceeds on the deal will total about $825 million, Bombardier said. The price represents a gross pretax premium of $225 million over the book value of the inventory financing assets being sold.
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