Canadian pension giant nearing deal with General Electric.
TORONTO • The Canada Pension Plan Investment Board is closing in on a deal to buy General Electric Co.’s private equity lending business in the United States.
A source said on Sunday that the deal is close to being signed, but the timing is still uncertain. The Wall Street Journal reported that the two sides are aiming to sign an agreement on Monday, while noting there is still a chance that GE could sell to a different bidder.
The transaction would involve more than US$10 billion of assets, but less than the unit’s full book of US$16 billion, according to the Journal. Bloomberg said last week that the transaction would value the unit’s equity at more than US$4 billion.
Spokespeople for both GE and the CPPIB declined comment.
The deal would be another major coup for the CPPIB and its chief executive Mark Wiseman, who has been pursuing numerous acquisitions around the world.
In the past few months, Canada’s largest pension fund has been involved in deals to buy software company Informatica Corp., shopping malls in South Korea and Spain, a student housing company in the United Kingdom, and stakes in firms involved in the telecom and port infrastructure markets in the U.K.
From GE’s perspective, the sale is part of chief executive Jeff Immelt’s strategy to shed most of the firm’s finance business and return it to its roots as an industrial products com-
Deal would be another major coup for the CPPIB and its CEO Mark Wiseman
pany. GE announced in April that it was looking to sell about US$200 billion of finance assets, which is around the time it began talks with CPPIB.
GE’s private equity lending unit also drew interest from several U.S. firms, including private equity players. The other bidders include Apollo Global Management LLC, Ares Management LP, and Guggenheim Securities LLC, according to reports.
Assuming CPPIB closes this deal, it would instantly become one of North America’s largest lenders to private equity firms. Most of the loans that the pension fund wants to buy are in a GE subsidiary called GE Antares Capital, which has hundreds of clients in the private equity space.
The CPPIB had net assets of $264.6 billion as of March 31, which was the end of its fiscal year. Canadian assets made up 24.1 per cent of the portfolio on that date, with international assets making up the remaining 75.9 per cent. The pension fund completed 40 transactions of more than $200 million each in its last fiscal year.