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Ally Financial exiting foreign markets

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Staff writer |
Ally FinancialAlly Financial Inc., a former finance division of GM, ex General Motors Acceptance Corporation, announced second selling of its non-US operation in a week. Ally will sell its Canadian auto finance unit to Royal Bank of Canada for $4.1 billion.

Ally said that it has reached an agreement to sell Ally Credit Canada Limited and ResMor Trust to Royal Bank of Canada, Canada's largest bank. The transaction is expected to close in the first quarter of 2013. Ally will receive an approximately $620 million USD premium to book value, which for the third quarter of 2012 was approximately $3.5 billion. Based on the third quarter total equity for the Canadian operations, Ally would receive approximately $4.1 billion USD in proceeds from this transaction.

Five days ago the company has reached an agreement to sell its Mexican insurance business, ABA Seguros, to the ACE Group. ABA Seguros is the fourth largest insurer in the Mexican auto insurance market, and the transaction has a purchase price of $865 million in cash.

Ally Financial CEO Michael A. Carpenter"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. 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," said Ally chief executive officer Michael A. Carpenter. The company expects to identify plans for operations in Europe and Latin America in November.

Ally's Canadian operations are based in Toronto and it had $13.6 billion in assets at the end of Q3 2012. The operations consist of Ally Credit Canada Limited and ResMor Trust, both subsidiaries of Ally.

Ally Credit Canada Limited is one of the largest auto finance companies in Canada with approximately $9.4 billion in assets at the end of the third quarter 2012. ResMor Trust offers deposit products through independent brokers. It had $3.8 billion in deposits and $4.2 billion in assets at the end of the third quarter 2012. Royal Bank of Canada is among the largest banks in the world, based on market capitalization.

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