GM snaps up AmeriCredit
US car giant General Motors (GM) yesterday said it would acquire auto finance company AmeriCredit for $3.5bn (£2.29bn) in cash in a deal aimed at easing financing terms for subprime car buyers.
The deal, which remains subject to approval by AmeriCredit’s shareholders, would give
GM a captive finance arm for the first time since it sold off a controlling stake in GMAC in 2006. GM dealers have complained that tighter financing terms have cost them sales in a US car market that has failed to deliver the strong recovery many had anticipated in 2010.
GM, which was restructured by the US government in bankruptcy, is preparing for an initial public offering later this year, people familiar with those discussions have said.
Addressing its lack of a captive finance company removes an uncertainty for GM as it prepares for a stock offering intended to reduce the US government’s nearly 61 per cent ownership stake. Under terms of the deal, GM would pay AmeriCredit shareholders $24.50 per share. That compares with Wednesday’s closing price of $19.70 before the deal was announced.
GM boss Ed Whitacre said: “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.”