GE Capital to Acquire Franchise Finance for $1.4 Billion

GE Capital, a unit of General Electric (GE Quote), signed an agreement to acquire Franchise Finance Corp. of America (FFA Quote) for about $1.4 billion.

Stockholders of Franchise Finance, a real estate investment trust, will receive $25 in cash for each of their shares. The company, which is based in Scottsdale, Ariz., has 56.1 million shares outstanding, giving the agreement a value of about $1.4 billion.

The acquired company will operate as Franchise Finance Corp. of America, a division of GE Capital Commercial Equipment Financing. The acquisition is designed to improve GE's place in the franchise finance market.

In recent trading on the New York Stock Exchange, Franchise Finance gained $1.19, or 5%, to $24.91. GE, which is based in Fairfield, Conn., was up 7 cents, or 0.2%, to $41.47.