Merrill Lynch Sells Most of Commercial Finance Unit (MER, GE)

General Electric (NYSE: GE) is acquiring most of Merrill Lynch Capital, which is the unit of Merrill Lynch (NYSE: MER) wholly-owned middle-market commercial finance business.  Unfortunately the financial terms are not disclosed.  This will add more than $10 billion in assets and $5 billion in commitments to GE Capital Commercial Finance’s base of $260 billion.  A further breakdown of the group being bought is as follows:

• corporate finance, equipment finance, franchise, energy and healthcare finance units; but commercial real estate finance unit is not part of the transaction.

So we do not have the exact terms of the deal, but John Thain of Merrill Lynch noted that this will enable the redeployment of approximately $1.3 billion of capital into other parts of Merrill Lynch.

Because it is more than two hours to the open and because of a thin volume shortened trading session, we haven’t seen any solid indications to see if this is going to drive Merrill Lynch stock.  Merrill Lynch appears to be up 1%, but that is on too thin of indications to use as a solid number.

As a reminder, U.S. stock markets close today at 1 PM EST.

Jon C. Ogg
December 24, 2007

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