GM Financial will pay $4.2 billion for Ally’s European and Latin American auto lending operations.
In May, Ally Financial, which is 74% owned by the US government, announced its plans to sell its international auto lending operations, in an attempt to make the repayments of bailout funds sooner than planned. The company has already sold its operations in Mexico and Canada, and is currently focusing on its US business.
GM will buy Ally’s operations to increase its sales in Latin America and Europe, also reflecting its experience in North America. Ally, who was once known as GMAC, is GM’s former financing arm. Since it sold a controlling stake in GMAC to private equity firm Cerberus Capital Management back in 2006, GM has been trying to gradually rebuild its finance operations.
“We’re bringing those parts of Ally back into the family,” said Dan Ammann, GM’s chief financial officer, on a conference call with reporters.
Mr. Ammann also said that since GM Financial was created, GM made 200,000 additional auto sales in North America, thanks to leases, auto loans and dealership upgrades. Ally’s operations in Europe and North America includes the following countries: the Netherlands, Sweden, Switzerland, Germany, Britain, France, Brazil, Mexico, Colombia, Chile and Austria.