Ally Financial: Setting Up for a Buyout?
Just to keep you up-to-date on a business that is owned by U.S. taxpayers, Ally Financial Inc. said today that it had sold its Canadian assets to Royal Bank of Canada (NYSE: RY) for $4.1 billion. Last week the company sold its Mexican insurance business for $865 million in cash.
In 2008, Ally, formerly the auto financing division of General Motors Co. (NYSE: GM), received more than $17 billion in bailout funds from the U.S. Treasury in exchange for a 74% ownership stake in Ally. Ally will have paid back about $5.8 billion of the funding by the time it makes a dividend payment next month.
The company's mortgage subsidiary, Residential Capital (or ResCap) filed for bankruptcy in May and Ally has been trying to sell off its international assets as well in order to pay back its bailout.
Ally's two remaining units will likely be its auto lending business and its online bank. In March the Treasury Department nudged Ally to separate the two, but so far the company has resisted the government's hints. There was some talk at that time that GM may be interested in re-acquiring the auto lending business and now that ResCap is gone, that becomes a more active possibility.
Filed under: 24/7 Wall St. Wire, Banking & Finance, Mergers and Buy Outs, Politics Tagged: GM, RY