GM preparing to bid for Ally’s lending units in Europe, Latin America

Article by Anita Panait, on September 21, 2012

General Motors Co. is getting ready this week to make an offer to acquire Ally Financial Inc.'s auto-lending units in Europe and Latin America, three people privy to the matter told Bloomberg. GM, however, will not be making an offer to acquire Ally's Canadian operations or its Mexican auto insurer, the sources further disclosed.

Ally Financial has been selling its operations outside the U.S. since 2012 to be able to repay a US government bailout. Ally set the bid submission deadline for interested buyers on Sept. 21, 2012, after around 30 companies showed interests in July, the sources told Bloomberg. Should GM succeed in acquiring Ally’s European and Latin American arms, it would be able to more than double the assets of its GM Financial unit. GM created GM Financial in 2010 after acquiring AmeriCredit Corp.

GM owned Ally’s predecessor until 2006, when the carmaker divested 51% of it to Cerberus Capital Management LP. As for Ally’s Canadian operations, interested buyers include lenders Toronto-Dominion Bank and Royal Bank of Canada one of the sources disclosed. TD acquired the former lending unit of Chrysler LLC in 2011 for $6.3 billion.

In a statement, GM said that although it has disclosed its interest in acquiring some units of Ally’s international operations, it was not prepared to “discuss the topic in any detail in the middle of the process.” Ally, on the other hand, expressed delight on the “breadth and depth of interest in the international businesses," according to spokeswoman Gina Proia.

Topics: gm, ally financial

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