General Electric Co. said Sumitomo Mitsui Financial Group Inc. agreed to buy its European buyout-lending unit for $2.2 billion, adding to its disposal of finance operations to focus on industrial businesses.

The deal follows the company's sale of its middle-market private equity lending unit, GE Antares, to Canada Pension Plan Investment Board, and planned exit of its fleet business to Element Financial Corp. 

The Sumitomo transaction is expected to be completed in the third quarter, the Fairfield, Connecticut-based company said in a statement Tuesday.

Chief Executive Officer Jeffrey Immelt is refocusing on industrial operations, making products such as jet engines, gas turbines and medical scanners. Japanese banks are looking abroad for growth as a declining population and shrinking loan margins hamper profit prospects in the world’s third-largest economy.

The sale extends GE’s pullback from lending to private- equity firms after a $12 billion deal on June 9 to sell most of the U.S. business to Canada Pension Plan Investment Board. GE said in May it expected to announce as much as $30 billion of financial-asset sales by June 30 as it works toward a $200 billion goal.

The European private-equity unit, which lines up financing for buyout firms, had been one of GECapital’s top sale priorities, along with the U.S. division and the health-care lending business, GE Capital CEO Keith Sherin said in a June 9 interview. The U.S. company agreed to sell the bulk of its vehicle fleet-management business to Canada’s Element Financial Corp. for $6.9 billion, according to a statement Monday.

Sumitomo Mitsui’s leasing unit is among companies that are interested in buying GE’s Japanese leasing business. GE plans to seek bids for the operation, which has 500 billion yen ($4.1 billion) of assets, as soon as July, people with knowledge of the matter said in May.

--With assistance from Takahiko Hyuga in Tokyo and Richard Clough in New York.


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