Pension Giant Buys GE Unit

The Canada Pension Plan Investment Board has agreed to purchase GE Capital’s private-equity lender Antares Capital.

General Electric (GE) and the Canada Pension Plan Investment Board (CPPIB) have reached a $12 billion deal for the sale of GE Capital’s private equity lending business and $3 billion in bank loans. 

The industrial conglomerate announced the planned transaction Tuesday morning, following weeks of rumors that CPPIB was courting the Sponsor Finance division assets. 

GE Capital

“This represents an important milestone as we continue to execute on our strategy to sell most of the assets of GE Capital,” said Keith Sherin, chairman and CEO of GE Capital. “The value we will achieve through this transaction is a testament to the depth of talent and expertise of the Sponsor team and our ability to execute high-value transactions quickly.”

GE’s announcement several months ago that it would pivot away from finance and refocus on its manufacturing and industrial core met with strong analyst approval and a stock price rally. 

The deal for Sponsor Finance brings sales agreements for GE Capital to a total of roughly $55 billion. The majority of the remaining assets will go on the block over the next 18 months, the parent company said, as “GE and its board of directors have determined that market conditions are favorable to pursue disposition.”

The company said it is on track to sell $100 billion in financial-sector assets by the end of 2015. 

With the deal, CPPIB has agreed to purchase Antares Capital—a lender to private-equity backed middle market companies—along with a $3 billion bank loan book. Antares will continue to operate as a standalone independent business following its handover to CPPIB, GE said. Founding Managing Partners David Brackett and John Martin are to stay on board. 

Sponsor Finance CEO Stuart Aronson will remain with GE Capital, the corporation said. 

The transaction—worth approximately $11 billion in ending net investment—is expected to close in the third quarter of this year.  

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