August 8, 2018 / 12:13 PM / in 3 months

GE Capital to sell energy finance unit to Starwood Property for $2.56 billion

The logo of General Electric Co. is pictured at the Global Operations Center in San Pedro Garza Garcia, neighbouring Monterrey, Mexico, May 12, 2017. REUTERS/Daniel Becerril

(Reuters) - General Electric Co’s financing arm said on Wednesday it will sell its energy finance unit and loan portfolio to Starwood Property Trust Inc for $2.56 billion, as part of a plan to shrink itself into a smaller, more focused business.

The 126-year-old industrial conglomerate has been divesting assets worth billions from its GE Capital unit since 2015 to focus on jet engines, power plants and renewable energy.

The agreement with Starwood also includes the transfer of a team of employees, GE Capital said.

The deal, expected to close in the third quarter, will add to Starwood’s core earnings, the real estate investment trust said.

GE shares were marginally higher in premarket trading on Wednesday.

Citigroup Global Markets was financial adviser to GE Capital, and Shearman & Sterling LLP provided legal advice. Sidley Austin LLP and Paul Hastings LLP were legal advisers to Starwood.

Reporting by Sanjana Shivdas in Bengaluru; Editing by Saumyadeb Chakrabarty

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