06/29/2015 07:12 EDT | Updated 06/29/2016 05:59 EDT

Element Financial to buy GE Capital's fleet operations for $8.6 billion

TORONTO - Element Financial Corp (TSX:EFN) says it has reached an agreement to buy GE Capital's remaining vehicle fleet management operations in the U.S., Mexico, Australia and New Zealand for $8.6 billion in cash.

GE Capital Fleet Services provides commercial car and truck financing and fleet-management services.

Element Financial, based in Toronto, said the acquisition includes staff, offices, agreements, intellectual property and other assets required to operate the businesses in each jurisdiction.

Element had already bought the Canadian operations of GE Capital's North American fleet management business in June 2013.

In a related transaction, GE has also signed a memorandum of understanding to sell its European fleet operations to Paris-based Arval, a wholly-owned subsidiary of BNP Paribas and Element's founding partner in the Element-Arval Global Alliance.

BNP Paribas, through Arval, specializes in vehicle leasing.

"Adding these very high quality businesses to our existing fleet operations firmly establishes Element as a leader in the North American fleet management industry," said Element CEO Steven Hudson.

GE recently announced it would sell most of GE Capital over the next two years for about $26.5 billion.

GE Capital Chairman and CEO Keith Sherin said in a written statement that the company is on track to sell off businesses worth about $100 billion by the end of the year and expects to be finished with the sales by the end of 2016.

The U.S. and Mexico deal is expected to close in the third quarter, while the Australia and New Zealand transaction is targeted to close in the fourth quarter.

— with files from The Associated Press