GE Capital and S.A.C Private Capital have agreed to sell their respective stakes in Taiwan’s Cosmos Bank to China Development Financial Holding Corporation, according to a statement.
The financial details of the transaction were not disclosed, but a source close to the matter told Private Equity International that the sale was worth about $760 million for the combined 82 percent stake.
GE held a 25 percent stake, while hedge fund manager S.A.C held 57 percent of the business. The pair acquired their respective interests in the bank in 2007 in a deal worth $900 million, according to media reports.
GE declined to comment, but a source close to the firm said that the sale is part of wider plans to refocus activities back on its major industrial business lines, rather than equity investing globally.
GE Capital, the private equity arm of the American conglomerate, currently manages around 40 percent of GE's earnings, which will be reduced to around 30 percent, the source said, without giving a time-frame.
“There are various things going on to help produce that [mix] and help get things in line with GE’s long-term strategy. [For example] in the US, later this year the firm is looking at doing an IPO of some of its retail banking operations,” he said.
The source did not go into specifics as to why the firm is pulling back from its private equity investments.
GE's profit rose 5 percent in Q4, bolstered by growth in its industrial businesses and a gradual improvement in the US economy, the conglomerate said after its fourth quarter earnings release.