GM Financial to Acquire Ally Financialís International Automotive Financing Operation

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Thread: GM Financial to Acquire Ally Financialís International Automotive Financing Operation

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    GM Financial to Acquire Ally Financialís International Automotive Financing Operation

    GM Financial to Acquire Ally Financialís International Automotive Financing Operations
    GM
    November 21, 2012

    General Motors Financial Company, Inc., (GM Financial) a wholly owned subsidiary of General Motors Co. (NYSE: GM), announced today that it is acquiring automotive financing operations in Latin America, Europe and China from Ally Financial Inc. (Ally).

    ďGM is entering the most aggressive rollout of new vehicles in its history and this acquisition will make us an even more formidable competitor by ensuring that competitive financing is available to our customers and dealers around the world,Ē said GM Senior Vice President and CFO Dan Ammann.

    GM established GM Financial in 2010 to add captive financing capabilities in the United States and Canada in strategic and underserved segments. With the addition of Ally International Operations, GM Financial will be able to support GM customers and dealers in markets comprising about 80 percent of GMís global sales while earning strong risk-adjusted returns.

    ďThe Ally International Operations have very strong underwriting and risk management, close relationships with GM dealers and an excellent customer service reputation,Ē said Dan Berce, president and CEO of GM Financial. ďThe addition of these businesses significantly strengthens GM Financialís core role, which is to support the sale of GM vehicles. The international operations leadership team will also transition to GM Financial, which will provide tremendous continuity for stakeholders and customers.Ē

    The transaction includes operations in Brazil, Mexico, Colombia, Chile, Germany, the United Kingdom, France, Italy, Belgium, the Netherlands, Sweden, Switzerland and Austria. It also includes Allyís 40 percent interest in its Chinese joint venture GMAC-SAIC Automotive Finance Company.

    To fund the purchase, GM expects to contribute approximately $2 billion in cash to GM Financial to increase its equity and ensure an appropriate pro forma capital structure.

    The purchase price for the acquired assets represents an approximately $550 million premium to their book value. As result of the acquisition, GM Financialís assets will double to approximately $33 billion and its liabilities, including consolidated debt, will increase to about $27 billion compared with about $12 billion today.

    The transaction is expected to add $300 million to $400 million to GM Financialís annual earnings before taxes (EBT). This will bring GM Financialís pro forma annual EBT run rate to approximately $1 billion. The transaction is expected to be completed in mid-2013, subject to regulatory approvals.

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    Re: GM Financial to Acquire Ally Financialís International Automotive Financing Opera

    GM should just buy Ally financial in the US as well since they already own 10% of them and Chrysler is abandoning them in favor of Santander.
    From the office of the Burnout Czar.

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    Re: GM Financial to Acquire Ally Financialís International Automotive Financing Opera

    I thought that the Canadian Ally was just purchased by the Royal Bank. Didn't the deal get done last week? How would this impact GM buying it? Or is it not going to happen in Canada?
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    Re: GM Financial to Acquire Ally Financialís International Automotive Financing Opera

    Jesus, this whole GMAC/Ally/ GM Financial thing has just gotten out of hand. GM just needs to restore its control over Ally/GMAC and have it back under the roof like it used to be. Just one of the latest of the many dozens of GM companies that has been spun off or discontinued....
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    Re: GM Financial to Acquire Ally Financialís International Automotive Financing Opera

    Remember that GM sold off the profitable GMAC arm a few years back for some big and
    quick cash...................

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    Re: GM Financial to Acquire Ally Financialís International Automotive Financing Opera

    Quote Originally Posted by Loyal2GM View Post
    I thought that the Canadian Ally was just purchased by the Royal Bank. Didn't the deal get done last week? How would this impact GM buying it? Or is it not going to happen in Canada?
    Correct, this deal is for the international operations.

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    Re: GM Financial to Acquire Ally Financialís International Automotive Financing Opera

    Yeah, Cerberus LLC, and we all know how well they seem to manage everything from GMAC to Chrysler...
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    Re: GM Financial to Acquire Ally Financialís International Automotive Financing Opera

    Anyone else notice the shell-game going on here?

    Sad that we were all duped into a circuitous method of dumping debt.

    The general public won't see anything, so I guess mission accomplished.

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    Re: GM Financial to Acquire Ally Financialís International Automotive Financing Opera

    ...sounds like GMAC is gonna rise from the "...ashes..." by selling the debt and burying the profit.
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