General Electric (GE) has signed a memorandum of understanding for the potential sale of its Equipment Finance and Receivable Finance businesses in France and Germany to Banque Fédérative du Crédit Mutuel (BFCM).

The potential agreement, subject to approval by regulatory and anti-trust authorities, will represent an ending net investment of around $7.5bn (€6.6bn).

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Keith Sherin, GE Capital chairman and chief executive officer, said: "We’re pleased to sign this memorandum of understanding with BFCM for a significant piece of our European business.As we continue to execute on our strategy to significantly reduce the size of GE Capital, we are excited that our long-time partner for French factoring would take forward our CLL business in France and Germany."

GE Capital’s Commercial Lending and Leasing (CLL) platforms in France and Germany provide factoring and leasing products and services to a broad range of commercial customers. As of 3Q 2015, the platforms had net earning assets (NEA) of respectively $6.5bn and $3.8bn."

BFCM is part of CM11 which belongs to Crédit Mutuel group, the second largest retail bank in France with a strong competitive positioning in home loans, SME and non-life insurance.

As previously announced, GE is embarking on a strategy to focus on its high-value industrial businesses and is selling most of GE Capital’s assets. GE will retain the financing "verticals" that relate to GE’s industrial businesses.

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The transaction would, if completed, contribute approximately $1.3bn of capital to the overall target of approximately $35bn of dividends expected to be paid to GE under this plan (subject to regulatory approval).