updated - September 30, 2020 Wednesday EDT
General Electric Co. (GE) is nearing the sale of its Japanese commercial lending business with only two bidders remaining, a person familiar with the matter told The Wall Street Journal.
The bids have valued GE's commercial lending and leasing operation at nearly $5 billion.
The person told The Wall Street Journal that Sumitomo Mitsui Financial Group's leasing arm and Shinsei Bank will continue discussions with GE to buy the Japanese operation.
The two companies have submitted binding bids this month.
The Wall Street Journal adds that the two Japanese companies have had a history of making deals with GE, who is looking to scale back its global finance operations.
GE has placed its Japanese business up for sale this year as part of its global plan to unwind GE Capital financing business.
The Wall Street Journal adds that Sumitomo, which is Japan's second-largest bank by revenue, has bought GE's European private equity business for about $2.2 billion in July.
Shinsei Bank, on the other hand, has bought GE's consumer finance operations in Japan in 2008 for $5.4 billion. The unit was sold due to the tight Japanese regulations.
The Wall Street Journal adds that GE will continue to negotiate with both companies rather than choosing a preferred bidder.
The seller usually picks a single preferred bidder after evaluating the binding bids and exclusively negotiates with the chosen bidder, in an auction process.
The Wall Street Journal adds that the final decision on the bids is likely to come in the next few weeks.
Reuters said that GE announced in April that it will be shedding most of its finance unit to become a "simpler" industrial business.
The company wants to veer away from the hybrid of banking and manufacturing that it has become.
Reuters adds that GE's restructuring plan includes buying back up to $50 billion of its shares and divesting more GE Capital operations.
The U.S. conglomerate is also looking to share $30 billion in real estate assets over the next two years.
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