GE Capital acquires Merrill Lynch lending business

24 December 2007

Mumbai: GE Capital, General Electric Co's commercial finance arm, has agreed to buy most of Chicago-based Merrill Lynch and Co.'s  wholly-owned commercial finance business.

Financial terms of the deal were not disclosed.

The acquisition, expected to close in the first quarter of 2008, will add more than $10 billion in assets and $5 billion in commitments to GE Capital's financial base of $260 billion - and boost existing businesses of GE.

Merrill Lynch & Co Inc., expected to report billions of dollars on mortgage losses, said the deal would allow the brokerage to redeploy about $1.3 billion of capital to other businesses of the company.

The acquisition will include Merrill Lynch Capital's corporate finance, equipment finance, franchise, energy and healthcare finance units. Merrill Lynch'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," said Mike Neal, vice chairman of GE. "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," he added.