Strengthening its efforts to increase market share in commercial lending markets, Wells Fargo & Company WFC completed the acquisition of General Electric Company’s GE commercial lending and leasing businesses in North America. Notably, Wells Fargo inked the deal with GE Capital, an arm of the Connecticut based company last October.
The acquisition comprised of GE Capital’s Commercial Distribution Finance, Vendor Finance and a part of its Corporate Finance business, reflecting assets of $27.4 billion, including loans of around $24 billion.
In its release, the California-based banking giant noted that the closure of the remaining international segment of the deal is likely to take place later this year. Notably, the total purchase includes assets of around $31 billion along with about 2,800 employees.
Tim Sloan, Wells Fargo’s president and chief operating officer stated, “The completion of this transaction strengthens our capabilities and deepens our customer relationships in key commercial lending markets across the U.S. and Canada.”
While the latest deal enhances Wells Fargo’s financial services business, for GE, the move is in line with its efforts to trim down its financial wing and focus more on its core industrial business. Notably, Wells Fargo and The Blackstone Group L.P. BX helped GE in commencing its finance overhaul in April 2015 by agreeing to purchase real estate assets worth about $23 billion.
Further, with the recent acquisition of GE Railcar Services from GE Capital, Wells Fargo Rail – the railcar finance, leasing and fleet management business of Wells Fargo – became the largest railcar and locomotive leasing company in North America with over 175,000 railcars and 1,800 locomotives.
Wells Fargo currently carries a Zacks Rank #3 (Hold). Piper Jaffray Companies PJC is a better-ranked stock in the finance space, sporting a Zacks Rank #1 (Strong Buy).
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