GE Capital Corp. has agreed to buy all of Avco Financial Services businesses in Australia and New Zealand from Associates First Capital Corp.

Terms were not disclosed.

Stamford, Conn.-based GE Capital would join companies such as HomeSide Lending and Countrywide Home Loans that operate American-style mortgage banks in Australia and Europe.

Avco's Australian and New Zealand operations have 160 branch offices and assets of more than $1.2 billion.

Associates First, a Ford Motor Co. spinoff, bought Avco's worldwide operations in January from Textron Inc. Both companies are based in Dallas.

Avco has 1,265 branches worldwide and ranks No. 1 among consumer finance companies in Australia and No. 2 in Canada and the United Kingdom.

The purchase was Associates' biggest ever and brought it $6.2 billion of assets. The price, $3.9 billion in cash, was almost three times book value and 20 times Avco's earnings last year.

Associates announced in March that it was looking to unload parts of Avco.

Roy Guthrie, Associates' chief financial officer, said the planned sale to GE Capital-announced last week-would let his company redeploy capital more effectively in other markets.

Philip S. Walker, an analyst at Fitch IBCA Inc., said that selling parts of Avco is just "a drop in the bucket" for a company Associates' size.

"Associates has been signaling to the market that they want to sell assets that do not really fit in, and reinvest," Mr. Walker said. "Associates had Australian operations in the 1980s, and they sold that off too. Maybe they don't have the skill or management strength in Australia."

Mr. Walker said that the GE Capital deal is just part of a corporate reevaluation at Associates, and that more house-cleaning is likely in the months to come.

"I think (Associates) is figuring out what does and does not fit, and opportunistically selling off those businesses that don't," Mr. Walker said. "It is a very timely exercise, and shows discipline on the part of its management team to sell when it makes sense, not just when you get spooked."

Last year National Australia Bank acquired HomeSide Inc. in an effort to replicate the overseas success of the Jacksonville, Fla., mortgage lending company.

The $1.23 billion acquisition brought $49.6 million of profits to National Australia in the six months through March 31.

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