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. Last Updated: 07/27/2016

GE to Acquire Bombardier Unit for $1.4Bln

CHICAGO -- General Electric said on Monday it would buy part of Bombardier financing division for $1.4 billion, the latest acquisition by GE's highly profitable commercial finance unit.

GE Commercial Finance, the business-to-business financing unit for the industrial, media and finance giant, will also assume $1 billion in debt and other liabilities related to the $2.2 billion business, Bombardier Capital's inventory finance division.

The commercial financing arm is GE's largest unit and works closely with GE's industrial businesses to provide financing for big-ticket items such as medical diagnostic equipment, power systems and jet engines.

The Bombardier unit, based in Vermont, provides financing for recreational products and vehicles, boats and manufactured housing. It employs 280 people.

The deal, which is expected to close as early as the second quarter, follows GE Commercial Finance's $4.4 billion acquisition of Citigroup's truck leasing unit in November and TransAmerica commercial lending business of Dutch insurer Aegon for more than $5 billion.

Net cash proceeds on the deal will total about $825 million, Bombardier said. The price represents a gross pretax premium of $225 million over the book value of the inventory financing assets being sold. As a result of the deal, Bombardier Capital will reduce the recorded debt and other net liabilities related to the inventory financing business by about $1.6 billion.

The deal is part of Bombardier Capital's portfolio wind-down, which was initiated in 2001, the company said. It said it would continue interim financing activities, as well as the wind-down of its remaining portfolios, including rail car leasing.

GE Commercial Finance was represented by Weil, Gotshal & Manges and advised by Citigroup Global Markets on the deal.

Shares of GE rose $1.03 to $36.13 early in Tuesday's trading on the New York Stock Exchange.