GE Commercial Finance, the financial services unit of General Electric, on Monday said it agreed to purchase about $2 billion in assets from the financing arm of aerospace company Boeing Co..
With the deal, which had been expected for some weeks, GE adds leases on office equipment, construction equipment, trucks and corporate aircraft to its $220 billion commercial finance portfolio.
For Boeing, the sale will allow it to pare down its Boeing Capital Corp. and focus on its core business of financing airplanes such as commercial jets and supporting its own programs. This portion of the business lists about $10 billion in assets.
The companies would not disclose how much GE paid for the portfolio. But Boeing said the price was a premium above the net asset value. It will gain $1.7 billion in deployable cash from the deal which it will use to repay debt and pay dividends to the parent company.
The deal requires government approvals and and is expected to close in the second quarter of 2004, the companies said.
