GE Capital plans to buy most of Merrill Lynch's (MER) commercial finance business for an undisclosed sum, the two companies said Monday.
The purchase includes Merrill's corporate finance, equipment finance, franchise, energy and health care finance units. Merrill's commercial real estate finance division isn't included in the deal.
The deal comes as Merrill is grappling with billions of dollars worth of writedowns from the subprime mortgage mess."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," said John Thain, Merrill's newly installed chairman and CEO. The transaction is expected to close in the first quarter of 2008.