April 4, 2006
General Motors reaches agreement to sell controlling stake in GMAC
Detroit, Michigan – General Motors has announced it has entered into a definitive agreement to sell its 51 per cent controlling interest in General Motors Acceptance Corp. (GMAC) to a consortium of investors led by private investment firm Cerberus Capital Management. GM expects to receive approximately US$14 billion in cash from the transaction over three years, including distributions from GMAC, with an estimated US$10 billion by closing.
GM says that the transaction strengthens GMAC’s ability to support GM’s automotive operations, improves GMAC’s access to cost-effective funding, provides significant liquidity to GM, and allows GM to continue to participate in GMAC’s profitability over the long term through its remaining 49 per cent ownership stake.
GM’s Board of Directors approved the sale in a special meeting on Sunday, following extensive consideration of the transaction and alternative strategies over the past several months. The transaction is subject to a number of U.S. and international regulatory and other approvals; the companies expect to close the transaction in the fourth quarter of 2006.