TORONTO (Reuters) - General Electric (>> General Electric Company) on Monday said it agreed to sell its fleet management arm in the United States, Mexico, Australia and New Zealand to Canada's Element Financial (>> Element Financial Corp) for $6.9 billion, moving it a step further in its plan to shed financial assets.

Separately, GE signed a memorandum of understanding to sell its European fleet segment to Arval, a subsidiary of BNP Paribas (>> BNP PARIBAS). GE did not disclose the sale price for this part, but a source close to the matter said GE is set to receive some $3.3 billion for this business.

The sale is part of a plan 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.

GE's deal with Element will transform the Canadian company into North America's largest fleet provider. The business finances and manages vehicles of companies that own vast fleets for sales staff, technicians and others on the move. GE sold its Canadian fleet unit to Element in 2013.

On closing of the deal, Element’s combined fleet management assets will include over a million vehicles under contract and net earning fleet assets of over C$13 billion ($10.5 billion). Its total assets will exceed C$21 billion.

BTIG analyst Mark Palmer said he sees the acquisition giving Element's stock a "significant boost."

Element and its advisors, BMO, Barclays, INFOR Financial and CIBC, also helped facilitate the side transaction with Arval for the GE's European fleet assets. The unit's final sale price was not been disclosed since a deal is subject to consultations with the companies' work councils.

Element said the related transaction expands the Element-Arval Global Alliance in Europe, giving it the capability to manage customer fleets in over 40 countries.

GE, advised by JPMorgan, said both deals together represent a total of $8.6 billion in assets. Excluded from the deals is GE's fleet business in Japan.

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. The Arval deal is also expected to close in the fourth quarter.

($1 = 1.2383 Canadian dollars)

(Additional reporting by Supriya Kurane in Bengaluru; Editing by Anupama Dwivedi and W Simon)

By Euan Rocha