GM to Acquire AmeriCredit for Approx. $3.5B

General Motors and AmeriCredit Corp. have entered into a definitive agreement for GM to acquire AmeriCredit, a leading independent auto finance company, in an all-cash transaction valued at approximately $3.5 billion.

The acquisition establishes the core of a new GM captive financing arm that will enable GM to provide customers with a more complete range of financing options, while creating significant growth opportunities for both GM and AmeriCredit. Since GM and AmeriCredit launched a successful non-prime program in September 2009, GM’s non-prime penetration has increased significantly, according to the company. Upon completion of the transaction, AmeriCredit intends to also re-enter the leasing business which will provide expanded leasing availability for all GM customers.

Direct ownership of AmeriCredit’s expertise will provide consistent availability of non-prime financing for GM customers throughout all economic cycles. While AmeriCredit already has relationships with approximately 4,000 GM dealers, this transaction will enhance dealer receptivity and improve sales penetration rates through coordinated GM branding and targeted customer marketing initiatives.

The AmeriCredit management team will remain intact, which is intended to assist in minimizing integration risk and maximizing opportunities between the two companies.

With total assets of approximately $10 billion, the acquisition of AmeriCredit poses minimal impact to GM’s balance sheet, and does not change GM’s objective of achieving strong investment grade status. Under GM ownership, AmeriCredit will maintain its own direct access to the capital markets for its financing requirements.

Under the terms of the agreement, which has been approved by both companies’ boards of directors, at closing, AmeriCredit shareholders will receive $24.50 in cash for each share of stock held as of the transaction closing date.

The transaction is expected to close by the end of the fourth quarter of 2010, pending certain closing conditions, including the approval of AmeriCredit shareholders.


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