Citigroup Sells Truck Finance Unit to GE for $4.4 Billion
Citigroup Inc. agreed to sell its business that provides lending and leasing to the trucking industry to General Electric Co. for about $4.4 billion as it sheds equipment-financing units, according to the Bloomberg News Service.
Citigroup, based in New York, will record a gain of about $90 million as a result of the transaction, the company said in a statement distributed by Business Wire. GE Commercial Finance, the business-to-business financing unit of General Electric, will keep the CitiCapital Transportation financial Services Group in Dallas and add 600 workers, it said in a statement.
“It just fits with what Citigroup has been doing, in divesting certain businesses they don't feel are core to the growth story,” said Joe Famoso, an analyst at National City Corp., which owned 7.1 million Citigroup shares as of September. “Maybe Citi felt that going forward, it wasn't a business they wanted to continue to invest in.”
Citigroup has been selling its equipment-leasing businesses, selling its U.K.-based medical, construction, and industrial unit to CIT Group Inc. General Electric Chief Executive Jeffrey Immelt is buying companies he thinks can help push profit growth to at least 10 percent annually starting next year, including leasing and business financing.
Profit at GE Commercial Finance, which already oversees the world's biggest aircraft lessor, is forecast to rise by 10 percent or more in 2005, Michael Neal, chief executive of the unit, said at an Oct. 26 investor meeting. GE Commercial Finance provided $20.8 billion of the parent company's $134 billion in sales last year.