General Motors Looks at Buying Ally Financial Unit — Reuters
In an exclusive report published late Friday, Reuters said that Ally Financial Inc. is near a deal to sell its automobile financing operations in Europe and Latin America for a price of about $4 billion. The most likely buyer, at this point, is General Motors Co. (NYSE: GM), which once owned Ally through its GMAC unit.
Ally received a $17.2 billion bailout from U.S. taxpayers in 2008, and has so far repaid about $5.9 billion. GM already owns 9.9% of Ally. Last week Ally sold its Canadian operations to the Royal Bank of Canada (NYSE: RY) for $4.1 billion. It has already sold its Mexican insurance unit for $865 million.
Ally has said it wants to focus on its U.S. auto lending and online banking units to turn its business around. The company's Residential Capital mortgage unit (ResCap) filed for bankruptcy last May.
GM, which is still part-owned by U.S. taxpayers, has said that it is interested in the international assets of Ally because it would help the carmaker sell more cars around the globe. However, GM's CFO has also said that the company is not interested in building another GMAC-style lender, which not only lent money for car purchases, but was also a commercial and residential mortgage lender.
Filed under: 24/7 Wall St. Wire, Autos, Banking & Finance, Bankruptcy, International Markets, Rumors Tagged: GM