Canada's Element Financial Corp (EFN.TO) said it will buy General Electric Co's (GE.N) fleet management operations in the United States, Mexico, Australia and New Zealand for C$8.6 billion ($6.98 billion) in cash.

GE also signed a memorandum of understanding to sell its European fleet businesses to Arval, a fully-owned subsidiary of BNP Paribas.

Reuters reported on Friday that Element was close to buying a large chunk of GE's vehicle fleet management business.

GE has said the business includes $9 billion in assets. The sale would be part of a plan it unveiled in April to divest about $200 billion in GE Capital assets as it moves away from finance and focuses on manufacturing industrial equipment.

"We are on track to execute sales of $100 billion by the end of 2015 and expect to be substantially done by the end of 2016," said GE Capital Chief Executive Keith Sherin.

The deals would contribute about $1.8 billion of capital to the overall target of about $35 billion of dividends expected to GE under this plan, GE said in a statement.

GE Capital Fleet Services provides commercial car and truck financing and fleet management services. GE Capital sold its Canadian fleet business to Element in 2013.

On closing of the deals, the Element-Arval Global Alliance will be capable of managing customer fleets in more than 40 countries, Element said in a statement.

Element expects the U.S. and Mexico deal to close in the third quarter of 2015, and the Australia and New Zealand deal in the fourth quarter.

BMO Capital Markets, Barclays, INFOR Financial Inc and CIBC acted as financial advisers to Element, while J.P. Morgan Securities LLC advised GE.