GE pares off financial unit and returns to industrial roots

FILE - In this file photo taken Dec. 2, 2008, a General Electric (GE) sign is seen on display at Western Appliance store in Mountain View, Calif. General Electric will sell most of GE Capital as it turns its focus more to its industrial business and away from a big money generator that also made some investors nervous. The company will buy back as much as $50 billion of its own stock, sending shares up 6 percent before the opening bell Friday April 10, 2015 and toward a new high for the year. (AP Photo/Paul Sakuma, File) FILE - In this file photo taken Dec. 2, 2008, a General Electric (GE) sign is seen on display at Western Appliance store in Mountain View, Calif. General Electric will sell most of GE Capital as it turns its focus more to its industrial business and away from a big money generator that also made some investors nervous. The company will buy back as much as $50 billion of its own stock, sending shares up 6 percent before the opening bell Friday April 10, 2015 and toward a new high for the year. (AP Photo/Paul Sakuma, File)

By Associated Press April 10, 2015 2 min read

General Electric is getting out of the lending business, a major profit generator, as it focuses more on its industrial business and sheds a massive financial unit that had its own set of risks.

The company will buy back as much as $50 billion of its own stock, sending shares up more than 9 percent before the opening bell Friday and toward a new high for the year.

In addition to the sale of GE Capital, the company will sell most of its GE Capital Real Estate to funds managed by Blackstone, and Wells Fargo will buy a portion of the performing loans at closing. The company also plans to sell additional commercial real estate assets that will bring the total value of the deal to around $26.5 billion.

The company said market conditions were favorable to sell most GE Capital over the next two years. The extended run of low-interest rates has made the sale of a huge asset like this more feasible.

The financial division generates almost half of the company’s profit, but is also is a huge regulatory burden and has caused some anxiety for investors.