General Motors Co. agreed to purchase the international auto financing operations of Ally Financial Inc. in a $4.2 billion deal that will help the manufacturer expand outside North America, Bloomberg reported.
The transaction includes operations in Brazil, Mexico, Colombia, Chile, Germany, the United Kingdom, France, Italy, Belgium, the Netherlands, Sweden, Switzerland and Austria, GM said in a statement. The deal also includes Ally’s 40% interest in a Chinese joint venture.
The purchase price represents an approximately $550 million premium to their book value, Bloomberg said. As result of the acquisition, assets held by the the automaker’s GM Financial division, which will operate the Ally business, will double to approximately $33 billion and its liabilities, including consolidated debt, will increase to about $27 billion compared with about $12 billion today, Bloomberg said. To fund the purchase, GM expects to contribute approximately $2 billion in cash to GM Financial, Bloomberg said.