According to the FT, Canada’s largest pension fund and GE Capital are nearing an agreement for the fund to purchase a large piece of the company’s crown jewel, GE Capital’s private equity lending arm.
The deal, which values the portion that the Canada Pension Plan Investment Board is interested in at $11 billion, could be announced later this evening, though FT’s source also pointed out that there’s still a possibility that the acquisition wouldn’t push through.
Offering loans between $30 million to over $500 million and with assets estimated at $16 billion, GE’s buyout lending business was heavily sought after by private equity firms such as KKR, the Blackstone group, Apollo Global, and Ares Management, with Ares fingered as the frontrunner to acquire the remaining $5 billion of the unit’s assets.
The sale comes after General Electric CEO Jeffrey Immelt decided on a broad retreat from their once-profitable financial business, intending to sell or spin-off a large part of the nearly $200 billion GE Capital and return the conglomerate to its core operations.
So far, they have sold the division’s real estate assets to Blackstone and Wells Fargo for $26.5 billion and are currently taking bids on their U.S. and global commercial lending units.
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