Japan's SMBC Nears Deal For GE's European Private-Equity Finance Unit : Report

(RTTNews) - Japan's Sumitomo Mitsui Banking Corp. is nearing a deal to buy General Electric Co.'s (GE) European private-equity finance business, the Wall Street Journal reported citing people familiar with the matter.

SMBC is expected to pay more than $2 billion for the unit, known as a sponsors unit and which finances buyouts and other transactions for private-equity firms in Europe. A deal could be announced as soon as Tuesday in Europe.

The Japanese bank prevailed over other bidders, including Apollo Global Management LLC and Ares Management LP, the report said.

The report noted that the sponsors deal doesn't include GE Capital's stake in its 3 billion euros or $3.4 billion joint venture with Ares, which also finances private-equity deals.

SMBC has been keen on buying some of GE's assets, including its Japanese finance unit and U.S. railcar-leasing business.

Earlier today, General Electric said it agreed to sell its fleet businesses in U.S., Mexico, Australia and New Zealand to Canada's Element Financial Corp. (EFN.TO), a fleet management and equipment finance company, for $6.9 billion or about C$8.6 billion.

GE also signed a memorandum of understanding for the potential sale of its European fleet businesses to Arval, a subsidiary of French lender BNP Paribas (BNPQY.PK, BNP.L). The deals are part of GE's strategy to sell most of the assets of GE Capital to focus on its high-value industrial businesses.