Varde Partners Inc, KKR & Co LP and Deutsche Bank AG agreed to buy General Electric Co’s Australia and New Zealand financial services unit in what they described as one of the region’s largest private equity deals.
GE Capital Corp’s Australia and New Zealand Consumer Lending Business is to be purchased at an enterprise value of A$8.2 billion (US$6.3 billion), the companies said yesterday.
“This partnership will provide a platform for growth in the dynamic consumer finance market,” Minneapolis-based Varde Partners co-CEO George Hicks said in a statement. “It is a natural extension of our deep expertise in specialty consumer finance and a great fit for us.”
The unit, which provides GE-branded credit cards and personal loans, has about A$7 billion of gross assets, people with knowledge of the matter said in December last year. It has about 100 branches and operates store cards for Perth-based Wesfarmers Ltd’s Coles supermarkets and Myer Holdings Ltd.
“GE has a strong platform for growth in our industrial businesses in Australia and New Zealand,” GE Australia & New Zealand president and CEO Geoff Culbert said. “This transaction allows us to focus on our strategy to be the world’s premier infrastructure technology company with a specialty commercial financial services business. We will continue to work with our customers in key industries including oil and gas, energy, healthcare, aviation and mining.”
GE has been shrinking GE Capital after the financial services arm threatened to drag down the group during the 2008-2009 credit crisis.
“We are delighted to be part of one of the largest private equity transactions ever in Australia and New Zealand,” Varde Partners Asia-Pacific lead partner Ali Haroon said in the statement. “This investment demonstrates Varde’s continued commitment to our Asia-Pacific business.”
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