Ally Financial

Ally Financial to Sell Remaining Foreign Operations to General Motors

Nov. 21, 2012
The deal was pursued to Ally, previously known as GMAC, to speed up repayment of a U.S. Treasury bailout.

Ally Financial on Wednesday announced a deal to sell its operations in Europe and Latin America, as well as its share of a joint venture in China, to speed up repayment of a U.S. Treasury bailout.

Ally said it had reached an agreement to sell its remaining international operations to General Motors Financial Co., a wholly-owned subsidiary of General Motors Co., its former parent.

Under the transaction, Ally would receive about $4.2 billion. The deal, subject to regulatory approvals, was expected to close in stages during 2013, the company said in a statement.

"In May, we began a process to pursue alternatives for our international operations in an effort to accelerate repayment plans for the U.S. Treasury's remaining investment," said Ally chief executive Michael Carpenter.

"This transaction represents the third and final agreement in recent weeks toward those goals, and, combined, these sales are expected to generate approximately $9.2 billion in proceeds."

Ally is the former troubled financial arm of General Motors. Previously known as GMAC Inc., the company received $17 billion in taxpayer funds, and the U.S. Treasury holds a majority 74% stake.

The transaction announced Wednesday includes auto finance operations in Germany, Britain, Austria, France, Italy, Switzerland, Sweden, Belgium, the Netherlands, Luxembourg, Brazil, Mexico, Colombia and Chile.

The combined operations in Europe and Latin America represented $16.1 billion in assets at the end of the third quarter 2012.

The sale also includes a 40% equity stake in a joint venture in China.

In October, Ally announced agreements to sell its Mexican insurance subsidiary, as well as its auto finance and deposit businesses in Canada.

"Our goals were to find the best solution for each of the businesses, while also maximizing shareholder value, and we believe those goals have been achieved," Carpenter said.

"Next, we are focused on completing each of these transactions and evaluating options to return capital to the U.S. Treasury."

Copyright Agence France-Presse, 2012

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