B2B Payments

GE Capital Exits Trade Finance With MUFG Acquisition

General Electric‘s divestiture of GE Capital assets continues as MUFG Union Bank announced plans to acquire GE Capital’s Trade Payable Services (TPS) operations. In an announcement on Wednesday (Jan. 16), MUFG Americas and GE Capital said MUFG Union Bank will acquire GE Capital’s supply chain finance platform for an undisclosed sum.

“The acquisition of this world-class platform accelerates MUFG’s growth trajectory in supply chain finance, and broadens our presence in this business,” said MUFG Head of North America Wholesale and Investment Banking Kevin Cronin in a statement. “TPS’ scale and functionality, combined with the outsourcing product and coverage capabilities of our supply chain finance team, give MUFG a distinct competitive advantage in this high-growth segment.”

The GE suppliers currently using the TPS platform will be transitioned to a new MUFG program within two years, after the deal receives the necessary regulatory approval.

“Global supply chain financing is undergoing significant change driven by new FinTech entrants, adoption of blockchain and other market-driven disruption,” added Head of MUFG Investment Banking for the Americas Jon Lindenberg in another statement. “By acquiring TPS, MUFG gains its flexible, state-of-the-art functionality immediately. Over the long term, we are committed to making incremental investments in this platform that will further differentiate us from our competitors.”

In 2015, BMO Financial Group announced it reached a deal to acquire GE Capital’s Transportation Finance operations, while Capital One landed the firm’s healthcare finance assets as General Electric pulled out of the financial services sector. At the time, GE said it aimed to divest $275 billion worth of assets in a shift toward industrial businesses. The company said it expected industrial businesses to account for as much as 90 percent of its earnings by 2018, up from 58 percent in 2014.

Months after announcing plans to exit the banking space, the U.S. Financial Stability Oversight Council voted to remove GE from the list of “systemically important” financial institutions, which require stricter oversight from regulators.

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