The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

GE Capital: GE Capital marches on Europe

GE Capital Services earns 37% of General Electric's profits, so it's anything but strategically insignificant. Right now its generals are engaged in a big push in Europe - it's taken over 34 businesses in two years. The strategy is to revive run-down assets by reshaping them with the company's "non-bank bank" formula. But purchases of traditional banks in eastern Europe are unnerving analysts. Can GECS be as successful with these as with British and French acquisitions? Brian Caplen reports.

When a British investment house decided to unload an ill-fitting credit business, it drew up a list of preferred buyers including a UK clearer and a Dutch bank. Deliberately left out of the bidding was GE Capital Services (GECS), the finance arm of General Electric, the world's largest company, which is keenly interested in vendor financing and had been trying to acquire the business, Pallas Group, for several years.

"We were not on the list because we have a reputation for buying cheap and tying our contract parties up in knots," says Christopher Mackenzie, president of GE Capital Europe.

But the fact that a seller either doesn't want to part with an asset or prefers to do a deal with someone else is not the kind of detail to prevent GECS from making an acquisition.

Mackenzie's business development team had already researched UK vendor financing and knew that Pallas, with high-profile clients including British Telecom, Minolta, Toshiba Information Systems and Sun Microsystems, was the asset it wanted. Vendor financing - which enables manufacturers to offer credit to wholesalers - is one of GECS' core activities and Mackenzie had been trying for some time to convince Pallas's parent company, SG Warburg, that GECS was the natural owner of the business.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors

LOGIN NOW

Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree