GM to buy Ally's Europe, LatinAm ops
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NO NEED FOR U.S. GOVERNMENT OK
Ammann said the deal had been approved by the GM board of directors but did not have to be approved by the U.S.government.
The transaction includes operations in Brazil, Mexico, Colombia, Chile, Germany, Britain, France, Italy, Belgium, the Netherlands, Sweden, Switzerland and Austria. It also includes Ally's 40 percent interest in its Chinese joint venture GMAC-SAIC Automotive Finance Company, GM said.
GM Financial will work to expand its international finance operations into markets where Ally has pulled back, including Russia, Australia and Argentina, Ammann said.
This expansion will be done "organically" and not by acquisitions, he said. Ammann said there is no need to expand its finance activities in North America.
The deal is expected to add $300 million to $400 million to GM Financial's annual earnings before taxes.GM expects to contribute about $2 billion in cash to GM Financial to fund the purchase, the automaker said in a separate statement.
The U.S. automaker bought AmeriCredit Corp in 2010 and in August disclosed it was among the bidders for Ally's international operations. GM and Cerberus remain Ally shareholders.
Ally said its combined operations in Europe and Latin America represented about $16.1 billion in assets at the end of the third quarter.
Of the $17 billion it owes the U.S. government, Ally has paid back $5.8 billion, including dividend payments.
The company is focusing on U.S auto lending and banking to turn its business around. In May, its Residential Capital (ResCap) mortgage unit filed for bankruptcy, and on Wednesday a bankruptcy court judge approved the sale of its mortgage operations to Ocwen Financial Corp and Walter Investment Management Corp for $3 billion.
ResCap is also selling a loan portfolio to Warren Buffett's Berkshire Hathaway Inc for $1.5 billion.