Ally Financial to Sell Canadian Subsidiaries
Royal Bank of Canada will acquire Ally Credit Canada Limited and ResMor Trust, Ally Financial announced this week. The sale is expected to close in the first quarter of 2013.
DETROIT — Ally Financial Inc. (Ally) has reached an agreement to sell its Canadian auto finance operation, Ally Credit Canada Limited, and ResMor Trust to Royal Bank of Canada (RBC) for $4.1 billion.
The transaction is is expected to close in the first quarter of 2013. Ally said it will receive a $620 million premium over book value from Canada’s largest bank. Book value for the third quarter was approximately $3.5 billion.
"This transaction represents another significant step toward our plans to pursue strategic alternatives for our international operations and accelerate plans to repay the remaining U.S. Treasury investment," said Ally CEO Michael A. Carpenter. "The Canadian transaction is the second transaction in a week to support these goals. We continue to evaluate options for our remaining international operations in Europe and Latin America, and we are encouraged by the progress and interest in the businesses."
Ally's remaining international businesses include automotive finance operations in Europe and Latin America. The company expects to identify plans for these operations in November.
Ally's Canadian operations are based in Toronto and represent the largest single country of operations outside the United States, with $13.6 billion in assets at the end of the third quarter.
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