GM will buy AmeriCredit, which is one of the U.S.’ top independent automotive financing companies, through an all-cash transaction of around $3.5 billion.
AmeriCredit will become GM’s captive financial arm after the two companies introduced a successful non-prime program in September last year, with the financial institution already collaborating with over 4,000 GM dealers.
Both sides will benefit from the transaction. GM will be able to cover a wider range of financing options for its customers, while AmeriCredit plans to re-enter the leasing business.
The move comes after months of a business study that saw GM searching for alternatives to reestablish an internal operation that would offer customer financing. One of the options was to reacquire parts of GMAC (now known as Ally Financial), GM’s previous financing arm, which was sold off in 2006.
The agreement, which has already been approved by both companies’ boards of directors, will see AmeriCredit shareholders receive $24.50 in cash for each share of stock held as of the transaction closing date.
The deal is expected to be closed by the end of the fourth quarter of 2010.
“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 Chief Executive Officer, 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."
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