GE Money Swaps European Operations

The exchange is worth about $1.57 billion.

Banco Santander will acquire GE Money's businesses in Germany, Finland and Austria and its card and auto businesses in the United Kingdom. Banco Santander will combine the operations with its consumer finance and cards divisions.

In exchange, GE will receive Interbanca, an Italian commercial bank that Banco Santander acquired as part of the purchase of ABN Amro Holdings NV. Interbanca will become part of GE's commercial finance division.

With the deal, GE Money is moving assets from consumer finance to higher growth commercial finance, said Robert J. Rendine, a spokesman for GE Money.

"It gives us at GE Money an opportunity to optimize our portfolio, to take resources, focus on higher growth, better and longer term growth prospects," he said. "From GE's point of view, we get a good new growth platform for commercial finance and a solid market like Italy."

The transaction is subject to the completion of definitive agreements and regulatory approvals.

GE Money, based in London, has assets of more than $200 billion. GE Money provides retail, banking and credit services to consumers, retailers and auto dealers in 55 countries.

GE Commercial Finance, which offers financial products and services, has assets of more than $300 billion and is based in Norwalk, Conn.

Separately, American Express Co. announced it is buying GE's commercial card and corporate purchasing business unit for $1.1 billion in cash. The sale is expected to be completed by the end of the month, American Express and GE Money said.

Corporate Payment Services was established in 1992 to issue GE's corporate travel, entertainment and purchasing cards to GE employees. It serves more than 300 large corporate clients.

GE is the unit's largest client and has signed a multiyear agreement to become a client of American Express.

GE chief executive Jeff Immelt told investor analysts in December that the conglomerate would consider alternatives to operating parts of GE Money, which generated $25 billion in revenue last year.

GE is evaluating whether to sell or keep its private label credit card and will announce its plans in the second half of the year, Rendine said. If GE sells it, the commercial card would be the only one remaining, he said.

"For us, it's all about scale," Rendine said. "It becomes a sub-scale business and not very strategic."

American Express did not immediately return a call seeking comment.

GE shares closed down 30 cents at $36.83 Thursday.

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