Darleen, maybe they (GE) know something and they ain't expanding in USA...
GE Capital Goes Bargain Shopping, Looks to Expand Throughout Europe
GE Capital Goes Bargain Shopping (Repeat): Company Spotlight (Repeats story that originally ran yesterday.)
Stamford, Connecticut, Sept. 4 (Bloomberg) -- GE Capital Corp., the world's largest non-bank financial institution, is going on a European shopping spree.
GE Capital's managing director in Europe, Daniel Porter, said he wants to expand in Italy, Spain and Greece, and in developing central European markets like Romania and Poland, where GE Capital is likely to look at banks. Porter likes these markets even more than he did earlier this month. ''Until a couple of weeks ago prices were high to make outright acquisitions,'' he said. As the financial troubles plaguing Russia ''drive prices down -- which it will -- it'll make life a little simpler because (acquisitions) will probably be more available,'' Porter said.
Acquisitions will become less expensive in areas like the U.K., Germany, Italy, Spain, Portugal and Greece, said Porter, who has headed GE Capital's European business since March.
GE Capital, which accounts for 40 percent of General Electric Co.'s earnings, will probably find negotiations easier since many institutions who once were tough competitors for assets, like U.S. banks, have had their profits slashed by declining international markets. General Electric Co.'s finance arm, Porter said, has almost no exposure in Russia where many banks were hit hard.
Porter's boss, GE Capital Chairman Gary Wendt, said Europe will account for 25 percent of the GE Capital's profits in four years. It currently has $53.5 billion of assets in Europe.
Southern Europe, including Spain, Italy, Portugal and Greece, ''is a focus for us,'' Porter said, . ''We've been very active in that arena trying to surface deals.''
GE Capital's interest in Southern and Central Europe has picked up since the prices of Western Europe acquisitions have gone up, said Nicholas Heymann, an analyst at Prudential Securities Inc., who rates GE ''strong buy.''
Eastern Europe ''Eastern Europe is not as well scoured by investment bankers,'' Heymann said. Eastern European countries, like Romania, have been privatizing consumer finance companies and banks, Heymann said, making it a good time to look at those businesses.
GE Capital, which already does businesses in 22 European countries, has been interested in forming joint-ventures in Southern Europe while it has been more likely to acquire businesses in other European countries, Porter said.
That's because a bank in Spain today competes only in its own market, he said. When the single European currency takes effect Jan. 1, that same bank will compete with larger European banks, Porter said, and might team up with another large bank or finance company to stay competitive. ''We'd be a pretty good partner in that respect,'' he said, ''because we don't compete directly with banks.'' GE Capital has 22 businesses ''that we can bring to the party.'' GE Capital would use its partners' distribution, provide them with new finance products and split the proceeds, Porter said.
The other strategy GE Capital uses in Europe is to buy a financial institution, then snap up its competitors, cut costs and merge the businesses, he said. That tactic has succeeded in the U.K. and in Sweden where it bought a consumer finance company which absorbed later acquisitions, Porter said.
The company has made almost 100 acquisitions in Europe in the last three years. Though the number of acquisitions was up in the first half of this year over the first half last year, the pace slowed a bit this summer, said Porter. The slowdown is probably short-lived, though, he added, since Europeans are coming back from summer holidays. ''I'm starting to feel better about the number of do-able deals,'' he said.
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