General Electric will sell its private equity business in a deal valued at about $12 billion as it refocuses on its core businesses and exits a banking sector now under stricter oversight.
The U.S. Sponsor Finance business, which includes Antares Capital, GE Capital's lending business to private equity-backed middle market companies, will be sold to the Canada Pension Plan Investment Board, alongside a $3 billion bank loan portfolio.
GE is looking to sell most of the assets of GE Capital over the next 18 months, but plans to keep the financing components that relate to its industrial businesses. The Fairfield, Connecticut, company is transforming itself back into an industrial conglomerate that makes large, complicated equipment for other businesses.
Investors had long pushed for GE to get rid of its finance unit, though it had been extremely profitable, as federal regulations and tough market conditions made it less lucrative and at times, more risky.
GE spun off its consumer credit card business, Synchrony Financial, into a separate publicly traded company in July. It sold a 51 percent stake of NBC Universal to Comcast Corp. for $13.75 billion in 2011. Two years later, Comcast bought GE's remaining 49 percent stake in NBC Universal for $16.7 billion.
General Electric Co. spun off its insurance business into a separate publicly traded company, Genworth Financial Inc., in 2004. It sold its reinsurance business to Swiss Re in 2006, and a year later sold its plastics business to Saudi Basic Industries Corp. GE sold silicones to private investment group Apollo Management LP for $3.8 billion in 2006 and sold its security business to United Technologies for $1.82 billion in 2010.
GE said Tuesday that it is on pace to execute sales of $100 billion by the end of the year.
The U.S. Sponsor Finance transaction is targeted to close in 2015's third quarter.
Shares of GE slipped before the opening bell Tuesday as US markets declined.