Ally to sell Europe, Latin America operations to GM
November 22 , 2012
Ally Financial announced on Wednesday it is to sell its Europe and Latin America operations to GM Financial, a unit of General Motors, for $4.2 billion.
The combined operations in Europe and Latin America make up about $16.1 billion in assets at the end of the third quarter, Ally said in a statement.
The deal involves two companies that are still partially owned by the U.S. government following a series of bailouts.
Both companies also have a linked history, with Ally once the financing arm of GM, which was known as GMAC.
The sale is expected to add $300 million to $400 million to GM Financials’ yearly earnings before taxes.
GM is likely to contribute about $2 billion in cash to GM Financial to fund the purchase, the automaker said in a separate statement.