The world of high finance is experiencing a major churning of sorts as two of the biggest names in the business, US's General Electric Co (GE) and Spain's Banco Santander Central Hispano SA agree to swap assets in a deal estimated to have a total valuation of €2 billion or $3.1 billion (approximately Rs13137.8 crore).

GE said on yesterday that its GE Commercial Finance unit finalised an agreement to acquire Banco Santander's Italian banking arm Interbanca, while the latter buys several GE Money businesses in Europe.

This deal follows a preliminary pact that was forged in March that called for Banco Santander to acquire GE Money's businesses in Germany, Finland and Austria, and its credit card and auto businesses in the UK.

At that time, GE had expressed its interest to get out of consumer finance and focus on commercial finance. The final agreement includes GE Money's card business in Ireland, as well.

Meanwhile, GE Commercial Finance will acquire Interbanca. The Italian commercial bank was assigned to Santander as part of the distribution of assets following the joint acquisition, together with Royal Bank of Scotland and Belgian-Dutch financial group Fortis of ABN Amro. (See: Royal Bank of Scotland- Fortis- Santander consortium acquires ABN Amro in world's biggest banking takeover)

Interbanca is the second Italian asset from the ABN Amro deal that Santander is offloading. Last November it announced it was selling Antonveneta, a northern Italian bank to Banca Monte dei Paschi di Siena for $13.2 billion in a deal widely considered highly favourable for the Spanish giant.

According to analysts, Santander's intention to become a major player in European consumer finance was not in sync with the offloaded assets. They were not large enough to be considered major players in their home country Italy. Hence, they were sold off.

On the other hand, GE has been cutting exposure to some of the more volatile areas of the finance industry, including mortgage lending. It has also put its US private label credit card and Japanese consumer lending units on the block.

Each transaction is valued at about €1 billion ($1.55 billion), and expected to close early in the fourth quarter, GE said in a statement.

Shares of Santander were trading down 2.4 percent at €13.07 in Madrid. Shares of GE fell 22 cents to $30.50 on New York Stock Exchange.

GE is a multinational American technology and services conglomerate incorporated in the American state of New York. In terms of market capitalisation as at 31 March 2008, GE is the world's third largest company. It declared revenues of $172 billion last year.

Banco Santander is the largest bank in Spain and the third-largest in the world by market capitalization. It is the centerpiece of banking group Grupo Santander that ha 126,000 employees, 68 million customers, 10,000 branches and 2.6 million shareholders. It posted annual revenues of $68 billion in 2007.