Report: GE Wants to Sell Healthcare Finance Arm
GE (NYSE:GE) is continuing its push to get smaller. Reuters reports the company has hired Goldman Sachs (NYSE:GS) to field offers for CareCredit, the financing wing that helps individuals cover healthcare costs not covered by insurance plans. After GE Capital was named one of the serious risks to the U.S. financial system, the company is looking to shrink its financing business by more than 30 percent.
According to the Friday report, several financial service firms and banks are looking into a possible buyout of CareCredit, which may fetch a price of $2 billion. Several sources reported that the plan has been in the works for over a month, and Goldman Sachs is now taking a second round of bids on behalf of GE. The company’s giant finance division has assets that make it the seventh-biggest financial institution in the country. After it was named one of the companies that presented a risk to the economy, GE has taken steps to make the division smaller.
GE hopes to achieve that goal through sales of CareCredit and other elements of the finance division. In all, the company is looking to shed as much as $200 billion of its $538 billion business by the end of next year.
Jeff Immelt, GE’s chief executive, announced earlier in the year that the company wanted to shrink parts of GE Capital through an IPO, and the CareCredit sale would continue helping the company meets its goals. The company’s bond sales of $32 billion in 2012 made it the biggest bond seller in the country last year, yet GE hopes to focus more on industrial equipment production and innovation.
GE’s CareCredit offers assistance to consumers who need help for healthcare costs when insurance plans won’t pay. It has been popular with people who need dental care that isn’t covered, as well as Lasik surgery, cosmetic procedures, hearing tests and even veterinary bills. Neither GE Capital nor Goldman Sachs commented on the report, but the sources that spoke to Reuters claimed that interest levels were high.
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