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Wells Fargo (WFC) Acquires GE Capital's CDF Business

Published 08/01/2016, 06:34 AM
Updated 07/09/2023, 06:31 AM

With an objective of increasing market share in commercial lending markets, Wells Fargo & Company (NYSE:WFC) completed the acquisition of General Electric Company’s (NYSE:GE) Commercial Distribution Finance (CDF) business in Australia & New Zealand. Notably, Wells Fargo sealed the deal with GE Capital, an arm of the Connecticut-based company last October.

The acquisition comprised of CDF assets and 123 team members at 5 sites in Australian markets and CDF assets and 7 team members at 2 sites in New Zealand. Notably, the Europe, Middle East and Africa (EMEA) segments closure is expected to take place later this year.

Significantly, Wells Fargo International Finance, LLC is acquiring the CDF assets in Australia, and Wells Fargo International Finance (New Zealand) Limited is buying the assets in New Zealand.

Previously, Wells Fargo had signed an agreement to buy GE Capital’s CDF and Vendor Finance platforms along with its Corporate Finance business. In Mar 2016, Wells Fargo completed the acquisition of commercial lending and leasing businesses in North America. The total purchase included assets of around $31 billion along with about 2,800 employees. Further, in Jul 2016, the banking giant completed the acquisition in Asia comprising CDF assets and 46 team members in Asia Pacific markets.

While the latest deal enhances Wells Fargo’s financial services business, for GE, the move is in line with its efforts to trim down its financial wing and focus more on its core industrial business. Notably, Wells Fargo and The Blackstone Group L.P. (NYSE:BX) aided GE in commencing its finance overhaul in Apr 2015 by agreeing to purchase its real estate assets worth about $23 billion.

Further, with the recent acquisition of GE Railcar Services from GE Capital, Wells Fargo Rail – the railcar finance, leasing and fleet management business of Wells Fargo – became the largest railcar and locomotive leasing company in North America with over 175,000 railcars and 1,800 locomotives.

Wells Fargo currently holds a Zacks Rank #5 (Strong Sell). Comerica Inc. (NYSE:CMA) is a better-ranked stock in the finance space carrying a Zacks Rank #2 (Buy).

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COMERICA INC (CMA): Free Stock Analysis Report

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