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.

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

GE Capital's commercial finance unit, based in Norwalk, Connecticut, has assets of over $260 billion. GE is a diversified technology, media and financial services company focused on solving some of the world's toughest problems. GE serves customers in more than 100 countries and employs more than 300,000 people worldwide.

Hit by the biggest loss in its 93-year history, Merrill Lynch was in the news for a cash infusion of as much as $5 billion from Singapore's state-owned Temasek Holdings to shore up its capital. (See: Merrill may get $5 billion investment from Singapore's Temasek)

Merrill Lynch is one of the world's leading wealth management, capital markets and advisory companies, and total client assets of almost $2.0 trillion.