updated 7/6/2005 9:05:00 AM ET 2005-07-06T13:05:00

GE Commercial Finance, a financial services arm of General Electric Co., said Wednesday that it agreed to acquire about $1 billion in aircraft assets from CIT Group Inc., a provider of commercial and consumer finance services.

The sale of a majority of the assets closed on June 30, and the rest of the sold assets will be transferred during the third quarter of 2005. Terms of the deal were not disclosed.

GE said the acquisition expands its corporate aircraft market reach, diversifies its customer base and creates additional cross-selling opportunities.

The deal includes about $200 million in leases and $700 million in loans on about 380 aircraft from CIT’s corporate aircraft portfolio. GE said the acquired assets will be integrated into the Commercial Finance unit’s existing corporate aircraft business, which leases and finances corporate aircraft and helicopters worldwide.

Separately, CIT noted that the sale will allow the company to re-deploy capital into higher-returning businesses.

“This is a thoughtful, strategic move for CIT. We will reinvest the capital from the sale of this portfolio into other Commercial Finance businesses which have stronger growth opportunities and better returns for our investors,” said Rick Wolfert, vice chairman of commercial finance.

The rest of CIT’s corporate aircraft portfolio — about $500 million in assets including fractional aircraft shares and aircraft leased to select client relationships — will be transferred to CIT Aerospace, which currently manages more than $5 billion in assets, from the equipment finance unit. CIT said it will continue to finance fractional aircraft shares and select corporate aircraft.

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