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General Electric Completed Its Synchrony Spin-Off in 4Q15

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Synchrony spin-off completed in 4Q15

General Electric (GE) completed its Synchrony Financial (SYF) spin-off into a stand-alone entity in November 2015. It was part of GE’s plan to exit most of its financial services (XLF) businesses by 2018.

Consumer financing was contributing ~60% to GECC’s (General Electric Capital Corporation) revenue. It’s now a discontinued segment, as the Synchrony split was completed in 4Q15. GE shed about 85% ownership stake, and about $20 billion in cash was returned to GE’s shareholders by giving them Synchrony Financial shares.

According to the terms of the deal, General Electric offered 1.1 shares of Synchrony Financial for each of its shares. This equated to a buyback of more than 671 million GE shares in exchange for approximately 705 million Synchrony Financial shares on full completion of the exchange offer. GE retired around 6%–7% of its outstanding shares through the offer and is likely to improve its bottom line on a per-share basis.

About Synchrony Financial

Synchrony Financial offers consumer financial services across the United States. The company’s offerings include consumer credit, promotional financing and loyalty programs, installment lending, and savings products.

In 2014, Synchrony Financial commanded a 42% share of the private label credit card market. It provided credit cards for brands including Amazon (AMZN) and Walmart (WMT).

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