By Mike Stone and Greg Roumeliotis
(Reuters) - Credit card lender Capital One Financial Corp is in exclusive talks to acquire General Electric Co's U.S. healthcare finance unit, in a deal likely to top $10 billion, according to people familiar with the matter.
The potential deal could bulk up Capital One's existing healthcare lending operations and bring GE one step closer to achieving its target of shedding about $200 billion worth of finance assets to focus on industrial manufacturing.
Capital One has outbid other potential buyers in an auction for the unit, the people said on Thursday, cautioning that the negotiations are ongoing and that a deal has not yet been finalised.
The sources asked not to be identified because the negotiations are confidential. GE did not respond to requests for comment.
"As a matter of practice, we do not comment on market rumours or speculation. As disclosed in our SEC filings, the company has every intention to fully deliver on our approved capital distribution plan," Capital One said in a statement.
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The healthcare finance unit offers direct loans to healthcare product and services companies as well as real estate loans to operators of assisted living facilities, nursing homes and medical practices.
The size of GE's finance arm and the potential risk stemming from its lending portfolio has made it subject to government oversight. GE plans to apply next year to escape its designation as a systemically important financial institution following the finance asset sales.
To date, GE has announced several deals as it advances with its initiative to refocus on its industrial roots. In April, the Stamford, Connecticut-based company agreed to sell about $26 billion of real estate assets to Wells Fargo & Co and Blackstone .
Subsequently, GE Capital agreed to sell its private equity lending portfolio to Canada Pension Plan Investment Board for $12 billion.
GE has also sold its vehicle fleet management arm in the United States, Mexico, Australia and New Zealand to Canada's Element Financial for $6.9 billion.
Based in McClean, Virginia, Capital One offers banking and credit card services to both individuals and businesses as well as investment services and healthcare finance. Capital One has a market capitalisation of $44 billion.
(Reporting by Mike Stone and Greg Roumeliotis in New York; Editing by Bernard Orr and Ken Wills)