Thursday, January 08, 2009

GE Capital Smoke Screen

GE Capital (GE) wholly owned by General Electric made some interesting announcements. They bought Interbanca S.p.A., a leading Italian corporate bank, from Banco Santander. At the same time GE Capital also completed the sale of former GE Money businesses in Germany, Austria, Finland, its credit card and auto businesses in the UK, and its credit card business in Ireland to Santander.

No terms, conditions or valuations were disclosed. GE literally gushed about the acquisition and made no comment about the dispositions. These guys are money guys. GE knows how to count. But the investing public is not a party to any of the salient data.

Just as in any sports trade involving professional athletes you have to wonder who got the better of the deal. But without the price tag/valuations it’s just something more in the black box which no one can figure out.