General Electric Co. agreed to sell its health-care finance unit to Capital One Financial Corp. for about $9 billion as the company accelerates the disposal of its lending operations.
Capital One will acquire the operation and about $8.5 billion of health care-related loans, GE said Tuesday in a statement. Separately, GE reached a deal with an unidentified buyer to sell approximately $600 million of real estate equity investments.
The Healthcare Financial Services unit, a provider of mortgages and loans to nursing homes and other health-care companies, is among the GE operations being sold as Chief Executive Officer Jeffrey Immelt shrinks the GE Capital banking unit that imperiled the parent company during the financial crisis. GE is divesting about $200 billion of GE Capital assets to focus on manufacturing.
“This announcement is the next step in GE’s transformation to a more focused industrial company,” Keith Sherin, CEO of GE Capital, said in the statement.
The latest accord builds on agreements last quarter to unload $23 billion of financial businesses, including the U.S. private-equity lending business sold to Canada Pension Plan Investment Board.
That deal, for Antares Capital, was announced in June, and will allow the unit to expand beyond senior debt in terms of making loans.
Capital One will retain the employees and management team of the health unit, including president Darren Alcus.
“This is a strategic investment in a specialty industry segment that we have been building out for the past several years,” Michael Slocum, president of Capital One’s commercial bank, said in a statement.
The deal is expected to close in the fourth quarter, GE said. Citigroup Inc. and JPMorgan Chase & Co., provided financial advice to GE, while Hogan Lovells US LLP served as legal adviser.
Credit Suisse Group AG and Wells Fargo Securities were financial advisers to Capital One, and Wachtell Lipton Rosen & Katz provided legal advice.
--Additional reporting by Allison Collins