Toronto-Dominion Bank in talks to buy Chrysler Financial

Article by Christian Andrei, on December 7, 2010

Insiders say that an agreement may be reached this week for Toronto-Dominion Bank, Canada's second-largest bank, to acquire Chrysler Financial Corp., the auto-loan company owned by Cerberus Capital Management LP.

One of these sources said that Chrysler Financial may sell for nearly $6 billion to $7 billion, which is the company's book value (computed as assets minus liabilities).

Nonetheless, the sources admitted that the talks might not proceed at all and that there are other potential buyers that are in discussions with Cerberus.

One source also said that the deal might be entered next week. They say that it’s likely that Cerberus will be able to recoup all of its investment in Chrysler Financial and give back some of the money to investors.

It has also been reported that Chrysler Financial, based in suburban Detroit, is composed mostly of old car and truck loans that consumers are still continuing to pay, along with a platform and technology that a buyer could use to begin an auto-lending business.

The Wall Street Journal reported that ING Groep NV is one of those who are in talks with Cerberus. Toronto-Dominion has spent over $19.9 billion in the last six years for the U.S. expansion. [via autonews - sub. required]

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