Japanese Banks Eye GE's Local Commercial Finance Operations

TOKYO—Japanese megabanks were among bidders Friday for General Electric Co.'s Japanese commercial finance operations, which are expected to fetch several billion dollars.

Financial services group Orix Corp. and the leasing units of Sumitomo Mitsui Financial Group Inc., Mitsubishi UFJ Financial Group Inc. and Sumitomo Mitsui Trust Holdings Inc. are among those who submitted non-binding bids, according to people familiar with the matter.

The bidders will conduct due diligence over the next several weeks and determine the value of the operations, with the price likely to be several billion dollars, they said.

GE is shedding the business, a key piece of GE Capital's Asia operations, as part of efforts to slim down. GE Chief Executive Jeff Immelt laid out plans earlier this year to sell or spin off the bulk of the $500 billion in assets held by GE Capital. Most recently it agreed to sell GE Capital Bank's online deposit platform, with $16 billion in deposits, to Goldman Sachs Group Inc. last month.

The Japanese commercial lending and leasing business has an asset value of about $5 billion, and the amount of equity required to make the purchase will depend on how those assets are financed, according to one of the people.

The sale is being handled by Morgan Stanley and a final decision on a buyer is likely to be made later this year, the people said.

GE already sold one of its global businesses to a Japanese player. Sumitomo Mitsui Banking Corp, the banking unit of SMFG, in July, bought GE's European private-equity financing business for about $2.2 billion. SMFG also expressed interest in the company's U.S. railcar unit, according to people familiar with the matter.

GE's commercial lending operations in Japan comprise several divisions, including direct lending to industrial companies purchasing big-ticket equipment such as heavy machinery. They also offer vendor financing, helping manufacturers provide smaller businesses with financing.

One particularly attractive business is a fleet-management operation that helps large Japanese companies, such as trucking and logistics operations, finance and manage ownership of trucks and automobiles. The aviation business isn't included in the sale.

Write to Atsuko Fukase at [e-mail]

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(END) Dow Jones Newswires

September 04, 2015 05:05 ET (09:05 GMT)

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