CitiCapital sells truck financing unit to GE
TORONTO, (Nov. 23, 2004) — CitiCapital, a business unit of Citigroup, has reached an agreement to sell its truck financing unit based in Dallas and Toronto to GE Commercial Finance for approximately $4.4 billion.
The Transportation Finance Business provides financing, leasing, and asset-based lending to the trucking industry. It has about 600 employees in Dallas and Toronto offices.
The deal — which is expected to close by the end of 2004 — is the last in a series of recent sales of leasing businesses at its CitiCapital unit.
The company said it expects an after-tax gain of approximately $90 million. The divested business doesn’t offer viable cross-selling opportunities, Citigroup says.
The deal means General Electric Co. is increasing its already substantial stake in truck and trailer financing. It will almost double General Electric’s assets serving the trucking industry to about $9 billion.
CEO Jeff Immelt says he thinks the move can help push yearly profit up at least 10 per cent starting next year as sales of heavy-duty commercial trucks for cargo hauling have risen in 2004 with no signs of slowing down next year.
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