Return to industrial roots: GE pares off financial unit

General Electric (GE) will sell most of GE Capital as it turns its focus more to its industrial business and away from a big money generator that also made some investors nervous.

The company will buy back as much as $50 billion of its own stock, sending shares up 6 percent before the opening bell Friday and toward a new high for the year.

GE will sell most of its GE Capital Real Estate to funds managed by Blackstone, and Wells Fargo will buy a portion of the performing loans at closing. The company also plans to sell additional commercial real estate assets that will bring the total value of the deal to around $26.5 billion.

The company said it decided market conditions were favorable to sell most GE Capital assets over the next two years. It noted that while GE Capital has been an important part of the company, "the business model for large, wholesale-funded financial companies has changed, making it increasingly difficult to generate acceptable returns going forward."

GE Capital Chairman and CEO Keith Sherin said in a printed statement that the successful initial public offering of GE's retail finance business, Synchrony Financial, helped show that the company's financial assets "can be more valuable to others."

The Fairfield, Connecticut, company will keep parts of its financing business related to its industrial operations, like GE Capital Aviation Services, Energy Financial Services and Healthcare Equipment Finance. The company says it will record about $16 billion in after-tax charges in the first quarter.