CitiCapital, the global commercial leasing business of Citigroup, has announced an agreement to sell its Canadian automotive fleet management business, Associates Fleet Services, in response to Canadian banking regulations.

CitiCapital is selling the unit to GE Capital Fleet Services, a unit of GE Capital. The sale does not include CitiCapital’s fleet management business in the United States or the United Kingdom. Although terms of the deal were not disclosed, the assets being sold to GE Capital Fleet are valued at approximately US$490 million. The transaction is expected to close in September 2001.

“We remain fully committed to the fleet management industry and will continue to look for growth opportunities for this business both in the United States and abroad” said Roy Guthrie, president and CEO, CitiCapital. “The sale of our Canadian fleet operation occurred entirely as a result of Canadian banking regulations that prohibit banks from owning more than 25% of any company engaged in automobile leasing. This regulation does not impact our other businesses in Canada.”

CitiCapital’s U.S. based Fleet operation will continue to offer a North American solution for customers. Citigroup entered the fleet management business through its acquisition of Associates First Capital Corporation in November 2000, and the commercial leasing division was renamed CitiCapital in March 2001. CitiCapital is a leader in the fleet management business in North America, with more than 360,000 vehicles under management.