Toronto, Ontario – TD Bank Group has agreed to purchase Chrysler Financial from Cerberus Capital Management. The agreement includes a cash consideration of approximately US$6.3 billion, with both the Canadian and U.S. branches of TD Bank acquiring the auto financial division, which will be headquartered in Toronto.
The acquisition will give TD all of Chrysler Financial’s processes and technology as well as its existing portfolio of retail assets on both sides of the border. Combined with TD’s current platforms in Canada and the U.S., the business will be positioned as a top-five bank-owned auto lender in North America.
“This transaction represents a unique opportunity to purchase a great organic growth platform at an attractive price,” said Ed Clark, group president and CEO of TD. “Chrysler Financial is a well-run business with the capacity for significantly higher returns over the next several years. This acquisition will allow us to leverage our lending expertise and financial strength to expand our presence in a large North American market with tremendous potential upside.”
Chrysler Financial has approximately 1,850 employees in Canada and the U.S. and has been operating for more than 45 years, and is one of the largest auto financing firms in North America. TD said that Chrysler Financial plans to focus on the prime market. The acquisition is expected to close in the second quarter of TD’s 2011 fiscal year.