BMO Financial Group has agreed to buy General Electric (GE) Capital’s transportation finance unit in the US and Canada.

GE Capital’s transportation finance business offers wholesale and commercial end-user financing to OEMs, dealers as well as end users for heavy and medium duty commercial trucks and trailers.

BMO will retain the business’ management team and employees following its takeover.

The deal, subject to customary regulatory and other approvals, is scheduled to be completed in December 2015.

BMO will fund the transaction mainly through existing balance sheet liquidity, additional deposits and wholesale funding.

BMO Financial Group CEO Bill Downe said: "BMO Financial Group is recognized as a market leader in commercial banking in both the U.S. and Canada; it is a core strength of the bank.

"The transportation finance assets we are acquiring have many of the characteristics of other business segments in which BMO has proven capability. This represents a unique opportunity to grow our commercial customer base."

The latest sale forms part of GE’s broader strategy to simplify operations by downsizing its financial operations through the sale of most GE Capital assets and focusing on continued investment in its industrial operations.

Under this strategy, GE will retain the financing units that directly relate to the company’s industrial businesses.

GE Capital chairman and CEO Keith Sherin added: "With the sale of our Transportation Finance business to BMO, we have again found a buyer with a customer centric culture who is committed to the industry and growing this business with the help of our tenured and experienced team.

"We continue to execute on our asset sales and are on track to reduce our ending net investment (ENI) by $100bn by the end of 2015 and expect to be substantially done with our exit strategy by the end of 2016."