NEW YORK - General Electric Co is near an agreement to sell its private equity lending unit to the Canada Pension Plan Investment Board , Canada 's biggest pension fund, according to a source familiar with the matter, as the conglomerate takes a big step in a planned massive pullback from its finance operations.
The deal with the CPPIB is expected to include GE's Antares Capital business, a middle-market lender for private equity- backed transactions, the source said. It does not, however, include all of GE's U.S. sponsor finance business, such as the joint venture with Ares Management, the source added.
GE and the CPPIB are aiming to sign the deal Monday, the Wall Street Journal first reported on Sunday, citing people familiar with the matter. Terms are still being negotiated for a takeover that would include more than $10 billion of assets but less than the unit's full book of $16 billion, the newspaper added.
Meanwhile, GE was also said to be in talks to sell almost half of its U.S. private equity lending arm to Ares Management after the firm refused to let GE unload the entire $18 billion unit to the CPPIB, according to a Bloomberg report, citing people familiar with the matter. Ares is pursuing a deal for the $8 billion Senior Secured Loan Program it co-manges with GE, the report added.
GE's retreat from lending and broader move to reduce its exposure to its finance arm comes as U.S. regulators move to curb aggressive lending by financial institutions that could pose systemic risk.
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GE announced plans in April to exit $200 billion worth of finance assets as it focuses on the manufacturing of industrial products.
Officials at GE did not immediately respond to requests for comment while officials at CPPIB declined to comment.
CPPIB had already started a direct lending business in an effort to invest more in high-yielding assets that will help it fund its long-term liabilities. Were it to clinch the deal, it would become one of the largest lenders to private equity firms in North America .
The CPPIB manages the assets of the Canada Pension Plan, a social insurance program that forms part of Canada 's public retirement system.
