December 15, 2015

 

Sumitomo Mitsui Financial Group, Inc.

 

Sumitomo Mitsui Finance and Leasing

acquires General Electric Group’s leasing business in Japan

 

Please be informed that Sumitomo Mitsui Finance and Leasing Company, Limited, our consolidated subsidiary, has today announced the attached press release.

 

December 15, 2015

 

Sumitomo Mitsui Finance and Leasing Company, Limited

 

 

Acquisition of General Electric Group’s Leasing Business in Japan

 

 

TOKYO, December 15, 2015---Sumitomo Mitsui Finance and Leasing Company, Limited (SMFL; President: Yoshinori Kawamura) has reached an agreement with GE Ireland USD Holdings Unlimited Company (GE Ireland), a subsidiary of General Electric Company (GE; Chairman & CEO: Jeffrey Robert Immelt), on the acquisition of GE group’s leasing business in Japan, subject to regulatory approval.

 

SMFL will acquire three leasing businesses^*1 of the GE group’s leasing business in Japan–equipment/asset leasing business, small-ticket leasing business and automotive leasing business (earning assets: approx. JPY510 billion as of December 31, 2014)–for approx. JPY575 billion by acquiring 100% equity interest in GE Japan LLC^*2 (tentative name) owned by GE Ireland, and making the company its subsidiary.

 

The Japanese leasing industry has substantial scale, with the volume of leasing transactions totaling approx. JPY5 trillion. Leasing demand is expected to remain steady, underpinned by a continued increase in corporate capital spending as the Japanese economy recovers under Abenomics.

 

Against this backdrop, SMFL and GE Japan aim to solidify their top-class position in the Japanese leasing market in terms of both quality and quantity by leveraging each other’s know-how and resources, thereby further increasing their enterprise value. In terms of quality, GE Japan has the unique know-how developed under GE, including efficient data marketing and business models utilizing digital innovation, the best-in-class automated credit screening system, sophisticated advisory business, and diversified cross-selling strategies. By leveraging this unique know-how, the marketing strategies and sales capabilities are aimed to be upgraded. In terms of quantity, GE Japan has a client base of approximately 483,000 companies with very little overlap with SMFL’s client base. As a result, the combined client base of SMFL and GE Japan will be one of the largest in Japan, enabling them to offer a wide-range of sophisticated solutions for the needs of an even larger client base, and achieve cost synergies and other economies of scale.

 

*1: Five leasing-related subsidiaries owned by GE Japan LLC (tentative name) will be acquired along with the three leasing businesses.

*2: GE Japan Corporation will be converted into GE Japan LLC.

 

<Outline of GE group’s leasing business in Japan>

Corporate name	GE Japan LLC (tentative name)
Headquarters	5-2-20 Akasaka, Minato-ku, Tokyo, Japan
Business profile	1)     Equipment/asset leasing business (targeting large and mid-sized companies; earning assets: approx. JPY180 billion; number of clients: approx. 18,000) 2)     Small-ticket leasing business (leasing of office/IT equipment, etc. mainly through digital channels; earning assets: approx. JPY240 billion; number of clients: approx. 450,000) 3)     Automotive leasing business (earning assets: approx. JPY90 billion; number of clients: approx. 15,000)

*As of December 31, 2014

 

Upon the completion of relevant regulatory process and subject to the satisfaction of the customary closing conditions to consummate the transaction, SMFL is expected to make GE Japan its subsidiary in April 2016.