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GE Capital to buy Fuji Bank's U.S. financial arm.

NEW YORK, July 30 Kyodo


U.S. moneylender General Electric (GE) Capital Corp. announced Monday it will acquire Heller Financial Inc., a financial arm of Japan's Fuji Bank, for $5.3 billion.

The deal, approved by Fuji's board, provides for a cash tender offer by GE Capital for all of Heller's outstanding common stock starting in five business days, said GE Capital, a subsidiary of U.S. conglomerate General Electric Co.

Fuji Bank will tender all of its holdings of Heller to GE Capital.

GE Capital has offered $53.75 a share, 50% higher than Heller's trading price in composite trading on the New York Stock Exchange last Friday.

The deal is apparently meant to counter Tyco International Inc., a U.S. financial company affiliated with Japan's Dai-Ichi Kangyo Bank, which bought specialty lender CIT Group, Heller's rival, in March.

The Heller deal suggests GE Capital, the world's largest moneylender, will continue to seek growth through acquisitions.

Heller's expertise in commercial finance, equipment leasing and real estate finance will enhance GE Capital's core operations in these areas, said GE Capital.

''Through this transaction, we gain not only the benefits of complementary services and geographic reach, but also the ability to provide new products,'' said Denis Nayden, chairman and chief executive officer of GE Capital.

Fuji Bank said the bank will support the deal through its wholly owned subsidiary, Fuji America Holdings Inc., a U.S. holding company of Fuji.

Fuji Bank acquired Heller in 1984. Heller, based in Chicago, currently has total assets of about $20 billion and earned net income of about $290 million in 2000.

Fuji holds about 52% of outstanding common shares of Heller. Profits from the deal, estimated at 120 billion yen, are believed to go toward financing the disposal of bad loans at Fuji.

The Japanese bank said its decision to approve the deal was based on its belief that the acquisition by GE Capital will strengthen Heller's continued growth and development.
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Publication:Japan Weekly Monitor
Date:Aug 6, 2001
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