GE To Sell Franchise Finance US Hotel Business To Western Alliance

(RTTNews) - General Electric Co. (GE) said that it reached an agreement to sell GE Capital's Franchise Finance U.S. hotel business to Western Alliance Bank, a wholly owned subsidiary of Western Alliance Bancorporation (WAL).

The sale includes about $1.4 billion in ending net investment (ENI) and the majority of the hotel business employees. The business provides real estate financing to owners of limited service hotel properties.

Separately, GE also reached an agreement to sell its Canadian Franchise Finance business, including most employees, to a different buyer, representing about $0.3 billion in ENI. The business provides financing primarily to the Canadian hospitality and restaurant industries.

When completed, the U.S. hotel business and Canadian transactions will contribute approximately $0.2 billion of capital to the overall target of approximately $35 billion of dividends expected to be paid to GE, subject to regulatory approval.

Both transactions are expected to close in the second quarter of 2016. Barclays provided financial advice to GE for both transactions. Hogan Lovells provided legal advice for the U.S. hotel transaction and McCarthy Tétrault LLP provided legal advice for the Canadian transaction.

Since the announcement of strategy in April 2015, GE Capital has signed agreements for approximately $161 billion and has closed $138 billion of those. In total, GE plans to sell approximately $200 billion of GE Capital businesses worldwide and expects to be largely complete with the process by the end of 2016.