GE agrees to buy most of Merrill Lynch middle-market finance business; closing expected in first quarter

By Devika Patel

Knoxville, Tenn., Dec. 24 - GE Capital Corp. announced it has agreed to purchase most of Merrill Lynch and Co., Inc.'s middle-market commercial finance business, Merrill Lynch Capital.

The acquisition of the Chicago-based company is expected to close in the first quarter of 2008, and will add more than $10 billion in assets and $5 billion in commitments to GE Capital Commercial Finance's base of $260 billion.

GE Capital will buy Merrill Lynch Capital's corporate finance, equipment finance, franchise, energy and healthcare finance units. Merrill Lynch Capital's commercial real estate finance unit is not part of the transaction.

"These strong units fit perfectly with existing and very successful GE Capital businesses," GE's vice chairman Mike Neal said in a press release. "They are in industries we know well, so the potential for growth is compelling. In addition, this timely acquisition will expand our reach, and expand the value we can offer customers."

"This transaction reflects Merrill Lynch's continued strategic focus on divesting non-core assets and optimizing capital allocation, while also enabling the redeployment of approximately $1.3 billion of capital into other parts of our business," Merrill Lynch chairman and CEO John A. Thain added in the release.

Norwalk, Conn.-based GE offers a range of financial services worldwide.

New York-based Merrill Lynch is a wealth management, capital markets and advisory company.

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