STAMFORD, Conn. (AP) - GE Commercial Finance, the business-to-business financial services unit of General Electric Co., said Monday it will purchase Bombardier Capital's inventory finance division for $1.4 billion in cash.
GE will also asume $1 billion in debt and other liabilities in the deal.
The target company, which is part of the financing division of Montreal-based Bombardier Inc., provides floor plan financing for a range of equipment in the U.S. and Canada. BCIFD is headquartered in Colchester, Vt., and has about 280 employees.
The Bombardier Capital division is comprised of four main business units that provide financing for a variety of products, including snowmobiles, all terrain vehicles, boats, motors, and boat trailers, as well as recreational vehicles.
The closing is expected to occur as early as the second quarter of 2005.
Separately, Bombardier said it will receive cash proceeds of $825 million from the sale, which marks the continuation of Bombardier Capital's portfolio wind-down, initiated in 2001.
Bombardier Capital said it will continue its activities of interim financing, as well as the wind-down of the remaining portfolios, including railcar leasing.
GE shares rose 26 cents to $36.01 in midday trading on the New York Stock Exchange, approaching their 52-week high of $37.75.
