Spanish bank Grupo Santander has agreed to purchase a $2 billion Mexican mortgage portfolio from General Electric Co.'s finance division for $162 million plus the assumption of debt, according to Dow Jones.
The deal, expected to close next year, involves Grupo Financiero Santander Mexico acquiring all of GE's consumer-mortgage business in Mexico, including its $2 billion consumer-mortgage portfolio.
The Dow Jones report said the sale fits with GE Capital's strategy "to exit non-strategic businesses that lack scale to help reduce GE Capital's balance sheet while investing in core industrial" and other businesses. That’s according to Mark Begor, president and chief executive of GE Capital's restructuring operations.
Santander said the deal will make its Mexican operations "the second leading provider of mortgages" in Mexico, according to Marcos Martinez Gavica, executive vice president of Grupo Financiero Santander.
One of GE Capital's Mexican initiatives was what it called a Mexican Dream Mortgage that hoped to sell Mexican retirement properties to U.S. baby boomers. In 2006, GE saw this as "a multibillion-dollar market" that could bring hundreds of millions to GE Capital, according to Michael Dodge, then a senior vice president of GE Money's WMC Mortgage Corp. division, according to Dow Jones.