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General Electric Co. (NYSE: GE) has been reducing the size of its GE Capital division, and the conglomerate just took another major step toward that goal.
The company announced today (Thursday) that it has filed an initial public offering (IPO) of its North American retail financing unit.
The newly public company will be known as Synchrony Financial. Currently, it supplies retail credit cards and reportedly makes credit card loans to more than 55 million American consumers.
According to analysts at Bernstein Research, the Synchrony IPO could be valued between $18 billion and $20 billion. The company will trade on the New York Stock Exchange under the ticker "SYF."
For comparison, Discover Financial Services (NYSE: DFS) will be one of Synchrony's largest competitors and has a market cap of $28 billion.
In November, GE announced that it would sell 20% of Synchrony in the IPO. The rest of the stock should be dispersed to GE shareholders next year.
While no official date has been set for the GE initial public offering, company officials expect the offering to take place before the end of the year.
The lead underwriters on the deal are Goldman Sachs Group Inc. (NYSE: GS), JPMorgan Chase & Co. (NYSE: JPM), Citigroup Inc. (NYSE: C), Morgan Stanley (NYSE: MS), Barclays PLC (NYSE: BCS), Credit Suisse Group AG (NYSE ADR: CS), Bank of America Merrill Lynch, and Deutsche Bank Securities.
With the GE IPO filed, shareholders have yet another reason to like the long-term prospects for GE stock…
GE IPO Spinoff Good News for GE Stock
In 2013, General Electric mentioned several times that it would be deemphasizing the financial unit of its business. According to shareholders, the company is stronger when it focuses on its industrial division.