PHILADELPHIA General Electric Co (GE.N) said on Monday its GE Commercial Finance unit finalized an agreement to acquire Banco Santander SA's (SAN.MC) Italian banking arm Interbanca, while the Spanish bank buys several GE Money businesses in Europe.
The formal agreement follows a preliminary pact that was forged in March that called for Banco Santander to acquire GE Money's businesses in Germany, Finland and Austria, and its card and auto businesses in the UK. The final agreement includes GE Money's card business in Ireland, as well.
Meanwhile, GE Commercial Finance will acquire Interbanca. The Italian commercial bank was assigned to Santander as part of the distribution of assets following the joint acquisition, together with Royal Bank of Scotland (RBS.L) and Belgian-Dutch financial group Fortis FOR.BR, of ABN Amro.
Each transaction is valued at about 1 billion euros ($1.55 billion), and expected to close early in the fourth quarter, GE said in a statement. GE and Santander reached a preliminary agreement on the asset swap in March.
GE has been cutting exposure to some of the more volatile areas of the finance industry, including mortgage lending. It has also put its U.S. private label credit card and Japanese consumer lending units on the block.
GE Money has more than $200 billion in assets, with in excess of 130 million global customers in 55 countries, GE said.
Shares of Santander were trading down 2.4 percent at 13.07 euros in Madrid. Shares of GE fell 22 cents to $30.50 on New York Stock Exchange.
(Reporting by Tenzin Pema in Bangalore and Jessica Hall in Philadelphia; Editing by Quentin Bryar and Dave Zimmerman)