GM Acquires International Lending from Ally
Nov 23rd 2012 9:56AM
Less than two weeks ago, a possible sale of Ally Financial Inc.'s international auto lending business to General Motors Co. (NYSE: GM) was just a rumor. Late Wednesday, when most of the U.S. was just getting into the holiday mood, GM announced that it had agreed to purchase the business from Ally for $4.2 billion.
Ally's international lending business covered about 80% of GM's global sales regions and gives the carmaker a potent competitive tool as it works to beef up international sales. The business unit includes European, Latin American and Chinese lending operations.
In one of those "not that again" moments, though, GM hopes that easier financing will attract more customers to its Opel division products. According to The Wall Street Journal, "Company executives are counting on easier customer access to loans and leasing to slow the financial losses at its Adam Opel AG unit."
GM's losses on its Opel unit have totaled about $16 billion over the past 12 years. Easier financing is not likely to turn that around. After all, GM owned Ally until 2006 and it didn't help sales then.
Ally has repaid about $5.9 billion of a $17.2 billion bailout from U.S. taxpayers, who still own about 74% of the troubled financial firm.
GM's shares are trading higher early this morning, up 1.8% at $25.06, in a 52-week range of $18.72 to $27.68.
Filed under: 24/7 Wall St. Wire, Autos, Financial Stocks, International Markets, Mergers & Acquisitions Tagged: featured, GM