Related News
GM buys Ally to build loan operations
Source: Agencies |
November 23, 2012, Friday
|
Print Edition
Print Edition
GENERAL Motors will buy Ally Financial's operations in Europe, China and Latin America as it tries to build a global finance unit to make low-interest car loans and boost sales.
The auto giant's US loan business, GM Financial, will pay US$4.25 billion for the Ally assets, helping GM to better compete in markets where other automakers already have their own loan operations. Automakers with their own finance arms often subsidize loans and leases to boost sales.
The deal, which still must be approved by regulators, is set to close in stages next year. Ally will get a US$550 million premium over the book value of the assets, which was US$3.7 billion in the third quarter, Ally said on Wednesday.
Ally, which was GM's financial arm until it was taken over by the US government in the 2008 banking industry meltdown, is selling off assets to raise money to repay the government for a US$17.2 billion bailout. So far Ally has repaid US$5.8 billion, leaving a balance of US$11.4 billion. The firm used to be called GMAC Financial Services.
The move will help GM by restoring a unit that once was highly profitable before the meltdown, Argus Research analyst Bill Selesky said. It also will help GM grow in countries where the middle class is expanding, he said.
"They believe that future growth will largely be determined by growth in emerging-market economies. They believe this is where the future of auto lending is going," he said.
The auto giant's US loan business, GM Financial, will pay US$4.25 billion for the Ally assets, helping GM to better compete in markets where other automakers already have their own loan operations. Automakers with their own finance arms often subsidize loans and leases to boost sales.
The deal, which still must be approved by regulators, is set to close in stages next year. Ally will get a US$550 million premium over the book value of the assets, which was US$3.7 billion in the third quarter, Ally said on Wednesday.
Ally, which was GM's financial arm until it was taken over by the US government in the 2008 banking industry meltdown, is selling off assets to raise money to repay the government for a US$17.2 billion bailout. So far Ally has repaid US$5.8 billion, leaving a balance of US$11.4 billion. The firm used to be called GMAC Financial Services.
The move will help GM by restoring a unit that once was highly profitable before the meltdown, Argus Research analyst Bill Selesky said. It also will help GM grow in countries where the middle class is expanding, he said.
"They believe that future growth will largely be determined by growth in emerging-market economies. They believe this is where the future of auto lending is going," he said.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
