GE Capital seals purchase of Lake

GE Capital Services Corp. of the United States has closed an acquisition deal with Lake Co., Japan's fifth-largest consumer credit firm, the two companies announced Friday.

In the deal, GE Capital's fully owned Japanese subsidiary, GE Capital Consumer Loan Co., will take over Lake's sales assets and employees, company officials said.

The subsidiary will leave Lake's name unchanged, and the newly revamped Lake is expected to be launched by the end of this year, the officials said. The acquisition is expected to give GE capital access to a base of some 1.4 million customers.

At a news conference in Tokyo, Taketo Yamakawa, president of GE Capital Consumer Loan, said the acquisition is the best way for both firms to enhance their consumer credit service businesses. "As far as this industry is concerned, there is still great market potential in this country," he said. "In fact, we've had a keen focus on Lake since a few years ago."

Said Lake president Tatsuhiko Taniguchi: "To survive the recent globalization of finance, we need GE's financial and managing resources."

GE Capital, the finance arm of General Electric Co. of the U.S., is the world's largest nonbank finance company and has been expanding its presence in Japan over the past few years.

Lake reported a 3.8 percent increase in its pretax profit to 32.3 billion yen for the business year that ended March 31, but it posted an extraordinary loss of 26.5 billion yen owing to loan losses at a subsidiary that stemmed from the collapse of a borrower.