Dec. 24 (Bloomberg) -- Merrill Lynch & Co., the world's biggest brokerage, agreed to sell most of its commercial finance business to General Electric Co.'s finance arm for an undisclosed price to free up capital after subprime losses.

The sale of Merrill Lynch Capital's corporate, equipment, energy and healthcare finance units is expected to be completed in the first-quarter, the companies said today in a Business Wire statement. The deal will add more than $10 billion in assets to GE Capital.

The transaction is part of New York-based Merrill Lynch's ``strategic focus on divesting non-core assets,'' and will release about $1.3 billion of capital to be redeployed elsewhere, said Chief Executive Officer John Thain in the statement.

Merrill on Oct. 24 announced $8.4 billion of writedowns on mortgage-related investments and corporate loans. The firm, which ousted Stan O'Neal as CEO in October, may report an additional $8.6 billion writedown for the fourth quarter, according to David Trone, an analyst at Fox-Pitt Kelton Cochrane Caronia Waller.

Rising defaults by the riskiest U.S. mortgage borrowers have rattled debt markets and led to more than $80 billion of credit- related losses at the world's biggest financial institutions.

GE Capital offers financial products and services worldwide, with more than $260 billion of assets. Merrill Lynch's commercial real estate finance unit isn't included in the transaction.

To contact the reporter on this story: Jon Menon in London jmenon1@bloomberg.net

Last Updated: December 24, 2007 08:00 EST