General Electric Co. is increasing its already substantial stake in truck and trailer financing.
The company announced Monday that it has agreed to buy the CitiCapital Transportation Financial Services Group for $4.4 billion in cash. The CitiCapital group provides lending and leasing to the trucking industry.
According to the announcement, GE Commercial Finance will keep CitiCapital Transportation Financial Services Group based in Dallas and add 600 employees to its existing 26,000.
Bloomberg news reported that GE is buying businesses that CEO Jeff Immelt thinks can help push yearly profit up at least 10 percent starting next year. He has targeted commercial finance as a source of higher profits and sales growth. Sales of heavy-duty commercial trucks used for cargo hauling are rising.
The transaction is expected to close by the end of the year, the companies said in their statements. It will almost double General Electric's assets serving the trucking industry to about $9 billion. CitiCapital Transportation Financial Services Group finances about 196,000 heavy- and medium-duty trucks and serves more than 49,000 customers in North America, the companies said.