GM to Acquire AmeriCredit for $3.5 Billion
"This acquisition supports our efforts to design, build and sell the world's best vehicles by expanding the financing options we can offer to consumers who want to buy GM vehicles," said GM chairman and CEO, Ed Whitacre. "Adding AmeriCredit to our team will improve our competitiveness in auto financing offerings, and I am very pleased to have them on board."
Since emerging from bankruptcy about a year ago, General Motors has been trying to revamp its operations. The Detroit automaker says the acquisition establishes the core of its new captive financing arm that will enable GM to provide customers with a more complete range of financing options, while creating significant growth opportunities.
GM and AmeriCredit launched a non-prime program in September 2009. Since then, the automaker says its non-prime penetration has increased significantly. And AmeriCredit already has relationships with approximately 4,000 GM dealers.
With total assets of approximately $10 billion, the acquisition of AmeriCredit poses minimal impact to GM's balance sheet, GM says. It, therefore does not change GM's objective of achieving strong investment grade status, according to the company.
The agreement has been approved by both companies' boards of directors. The transaction is expected to close by the end of the fourth quarter of 2010, pending certain closing conditions, including the approval of AmeriCredit shareholders.