Santander to acquire GE Capital business in Mexico

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GE Capital announced today the signing of an agreement whereby Grupo Financiero Santander Mexico will acquire GE’s consumer mortgage business in Mexico, encompassing all of its operations, including its $2 billion consumer mortgage portfolio.

Financial terms were not disclosed and the transaction, which requires customary regulatory approvals, is anticipated to close in the first half of 2011.

Headquartered in Mexico City, GE Capital has provided consumer mortgages in Mexico since 2002. Its consumer mortgage business has been part of GE Capital’s Restructuring Operations organization since early 2009.

“This sale is consistent with our strategy to exit non-strategic businesses that lack scale to help reduce GE Capital’s balance sheet while investing in core industrial and commercial finance platforms, including in Mexico. Our team in Mexico has done a great job managing the mortgage portfolio and will be a good fit with Santander,” said Mark Begor, President and CEO of GE Capital, Restructuring Operations.

“This acquisition is evidence of Santander’s confidence in Mexico, and is consistent with Santander’s strategy in Mexico of investing in the strengthening of our franchise, investing in the country, and the implementation of strategies that would allow us to continue growing in this market, particularly in products that assist in the wellbeing of Mexican families, such as in the case of mortgage loans. This acquisition will make us the second leading provider of mortgages in Mexico,” said Marcos Martínez Gavica, Executive President of Grupo Financiero Santander.

Mexico remains an important market for GE and GE Capital, which continues to be a leading provider of commercial lending in real estate, equipment and aircraft financing, transportation, structured and technology finance, and working capital. With 114 years of presence in Mexico, GE and its affiliates employ more than 35,000 people in the country. In October 2010, GE announced $60 million in investments in new projects that will create 500 new jobs throughout the country.