KKR & Co. L.P. Along With Varde Partners And Deutsche Bank AG To Buy GE’s Australian Consumer Finance Business


KKR & Co. L.P. (NYSE:KKR), with other partners, will purchase an Australian and New Zealand-based consumer lending business, formerly owned by General Electric Company (NYSE:GE) Capital, for $6.26 billion. According to a statement on Sunday, KKR &Co.LP, along with lead investment manager Varde Partners and Deutsche Bank AG (USA) (NYSE:DB), have confirmed their new deal. Currently, GE Capital has 3 million customers and an established footprint in Australia and New Zealand, besides top-ranking retailers being part of sales channels.

Australian Consumer Finance

KKR & Co. L.P. (NYSE:KKR) Director of Australian services, Ed Bostock, remarked that GE Capital’s domination of the regional market in consumer finance has been the most important factor influencing the acquisition. Much of the ‘track record,’ according to Bostock, stemmed from GE Capital’s partnership with leading retailers.

GE’s sheds Weight

The deal with KKR & Co. L.P. (NYSE:KKR) and the investment consortium has been crucial for GE Capital Corp. The company has been shedding its exposure to credit risks after the credit fiasco in 2008-09.

Besides, General Electric Company (NYSE:GE) has already shed its real estate arm of services, a stake in NBC Universal, as well as the appliances division.

The focus of the trimmer GE Capital Corp is now lending money to mid-sized companies, besides funding heavy equipment businesses. It has also resized it’s real estate vertical and has an interest in ‘commercial real estate.’

GE Electrical Australian and New Zealand services CEO, Geoff Culbert remarked that the deal will now allow GE to persist with its strategy to be an ‘infrastructure technology company’ with ‘commercial financial services business.’

GE Capital Australian services’ deal with KKR & Co. L.P. (NYSE:KKR), Deutsche Bank AG (USA) (NYSE:DB) and others was finalized, even as other consortiums had a bid for the business. Others who were interested in GE Capital were Apollo Global Management LLC and Wesfarmers Ltd, according to media reports.

Lisa Ray

Lisa Ray primarily covers Retail and Healthcare. Lisa Ray has completed her MBA (Finance) and an avid market tracker. She is a stock market analyst who closely tracks US markets along with other global markets like India. She has been expressing her views for years about markets and also advises various clients.

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