07/11/2008: Shinsei Bank Ltd. (TSE:8303) / GE Consumer Finance Co., Ltd.

2008 Deals You Should Know – Shinsei Bank / GE Consumer Finance

Deal Synopsis

Acquirer: Shinsei Bank
Target: GE Consumer Finance
Date: 7/11/2008
Deal Size: $5.4 Billion

General Electric sold its Japanese consumer finance operation to Shinsei Bank, as the U.S. conglomerate looked to spin off large parts of its portfolio.

Consumer lenders have seen their profits slide after Japan’s parliament approved a law to lower the maximum interest rate they can charge. The regulations will go into effect by 2009, and moneylenders have already lowered their rates in anticipation.

“In order to survive the regulation changes over the next two years the key is to get more market share,” said Kristine Li, an analyst at KBC Securities in Tokyo.

Investment banks involved:

UBS