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GE sheds US financial operations in $32b deal with Wells Fargo

NEW YORK — General Electric Co. is shifting its focus overseas after exiting almost all US finance operations in a sweeping plan to return to its manufacturing roots.

With an agreement Tuesday to sell $32 billion in GE Capital assets to Wells Fargo & Co., its divestitures this year now exceed $126 billion, GE said. It will next try to unload about $60 billion of international assets, including operations in France, Japan, and Italy.

“This is our largest transaction to date and a critical step in our efforts to reduce the size of GE Capital,” Keith Sherin, the unit’s chief executive, said in a statement on the Wells Fargo deal. “Globally, GE Capital expects to be substantially done with its exit strategy by the end of 2016.”

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After years of returns lagging behind benchmark US stock indexes, GE announced a plan in April to sell the bulk of its lending operations, a business once so large that it almost capsized the parent company in the financial crisis. By shedding most of GE Capital, as well as consumer units such as the appliances division, CEO Jeffrey Immelt has reemphasized industrial products such as jet engines, oil-field equipment, and locomotives.

The effort gained additional urgency this month after Nelson Peltz’s activist investment firm, Trian Fund Management LP, disclosed a $2.5 billion stake in Fairfield, Conn.-based GE. While supporting the pullback from GE Capital, Trian said it wants to see Immelt follow through on the plan and other efforts to boost margins.

After closing the US deals and completing a split-off of the North American retail finance operations now known as Synchrony Financial, GE plans to apply to drop its US government designation as an systemically important financial institution.