Cerberus Capital Management, L.P. and TD Bank Group and Cerberus Capital Management, L.P. recently announced an agreement under which Chrysler Financial will be sold to TD for cash consideration of around $6.3 billion.
TD has no intent to issue common equity in connection with this transaction. The purchase is comprised of net assets of $5.9 billion and around $400 million in goodwill.
Under the agreement, TD Bank, America’s Most Convenient Bank, a wholly-owned subsidiary of TD, will acquire Chrysler Financial in the U.S. and TD will acquire Chrysler Financial in Canada.
The acquisition will give TD all of Chrysler Financial’s technology and processes as well as its existing portfolio of retail assets on both sides of the border.
Combined with TD's current platforms in Canada and the U.S., the business will be positioned as a top 5 bank-owned auto lender in North America, following the transaction. Ed Clark, TD's Group President and CEO said the transaction represents a unique opportunity to purchase a great organic growth platform at an attractive price.
"This transaction represents a unique opportunity to purchase a great organic growth platform at an attractive price," said Ed Clark, Group President and CEO, TD. "Chrysler Financial is a well-run business with the capacity for significantly higher returns over the next several years. This acquisition will allow us to leverage our lending expertise and financial strength to expand our presence in a large North American market with tremendous potential upside".