GE Capital buys ABB portfolio

The newly-combined finance divisions of US giant General Electric have won the race to acquire ABB’s structured finance portfolio in a $2.3bn deal.

ABB, the Swiss-Swedish engineering business, has sold the majority of its structured finance business to GE Commercial Finance for $2.3bn, some way above earlier estimates which priced the deal at $2bn.

GE Commercial Finance, the newly-merged division comprising GE Insurance, GE Consumer Finance, GE Leveraged Finance and GE Equipment Management, will acquire total assets of about $3.8bn, including the ABB’s $3.4bn loan lease portfolio. ABB Structured Finance includes financial advisory business, infrastructure financing, export finance and leasing.

ABB, which selected GE Commercial Finance ahead of UK private equity firm Apax Partners and another undisclosed financial buyer, will use the entire proceeds to reduce the company’s net debt, which at the end of June this year stood at E5.2bn. Peter Voser, chief financial officer at ABB, said the proceeds would reduce total debt to $2.6bn by the end of 2002.

ABB confirmed that it will retain just under $1bn in leasing assets, representing about 15 per cent of the company’s structured finance business assets.