Ally Financial reached a deal Thursday to sell ABA Seguros, its Mexican insurance company, for $865 million as the auto lender strips itself of its foreign operations to repay its $17.2 billion government bailout.
The Monterrey, Mexico-based ABA Seguros was founded in 1956 and is the fourth largest insurer in the Mexican auto market. Detroit-based Ally is 74% owned by the U.S. Treasury and is selling ABA Seguros to ACE Group, one of the world’s biggest multiline property and casualty insurers.
Ally began seeking alternatives for its international operations, “and we have been encouraged by the breadth and depth of interest in these operations,” Ally CEO Michael A. Carpenter told The Detroit News.
In September, General Motors Co., the lender’s former parent, was among the nearly 30 bidders for Ally’s auto finance, insurance, and banking arms in Mexico, Canada, South America, and Europe. The bank has already repaid $5.7 of its bailout, and the operations sale could see it repaying another $5 billion.