General Motors Financial Co. and GMAC UK Plc have completed the purchase of Ally Financial Inc.’s 40% equity interest in SAIC-GMAC Automotive Finance Co. Ltd., a joint venture conducting auto finance operations in China. As a result of the purchase, GM Financial acquired a 5% equity interest in the venture, while GMAC UK acquired 35%.
“The close of the joint venture in China completes our acquisition of Ally’s international operations that began in November 2012,” said GMF President and Chief Executive Dan Berce. “This is an important step in our evolution as GM’s global captive finance company and in supporting its growth strategy. China is a significant market for GM, and we want to ensure the availability of competitive financing for its customers and dealers.”
Ally received about $1 billion for its stake and expects to record a first-quarter after-tax gain of $400 million related to the transaction, according to a press release.
Ally Chief Executive Michael A. Carpenter announced back in 2012 that the company was selling the joint-venture stake in China to GMF — along with operations in Europe and Latin America — as part of a process to accelerate repayment plans for the U.S. Treasury’s remaining stake in the company. Ally officially exited the Troubled Asset Relief Program last month.
