General Motors will acquire AmeriCredit in an all-cash transaction valued at approximately $3.5 billion, the firm announced today.

The deal creates the core of a new GM financing subsidiary that will enable the company to offer its customers a more complete range of financing options, while creating important growth opportunities for both GM and AmeriCredit.

The two firms launched a non-prime program in Sep. 2009, and GM’s non-prime penetration has increased substantially since that time, the company reported.

Additionally, AmeriCredit plans to re-enter the leasing business upon completion of the transaction, offering GM customers expanded leasing availability.

As a direct owner of AmeriCredit’s expertise, GM will be able to provide consistent availability of non-prime financing for its customers throughout economic cycles. Although AmeriCredit has already established relationships with nearly 4,000 GM dealers, the deal will further bolster the receptivity and improve sales penetration rates throughout coordinated GM branding and targeted customer marketing initiatives, according to the auto-company.

The acquisition of AmeriCredit, whose total assets are approximately $10 billion, will pose minimal impact to GM’s balance sheet and does not change the firm’s objective of achieving strong investment grade status. AmeriCredit is expected to maintain its own direct access tot eh capital markets for its financing requirements.

AmeriCredit shareholders will receive $24.50 in cash for each share of stock held as of the closing date, which is expected to fall at the end of 4Q10.

AmeriCredit will further support GM's financing capabilites. GM now has Ally Financial, which was founded in 1919 as General Motors Acceptance Corp. (GMAC), to provide automobile financing. Ally has also expanded its business to include insurance, online banking, mortgage operations and commercial finance, according to its Website.

"With AmeriCredit providing us niche capabilities in leasing and non-prime financing, along with the continued strong support of Ally Financial and others for prime retail and dealer financing, we've set up a very competitive solution for our financing needs, which will be resilient through credit and business cycles," said GM vice chairman and chief financial officer, Chris Liddell.

AmeriCredit came to the ABS market three times this year. Its last deal called AmeriCredit Automobile Receivables Trust 2010-2 priced on May 13.

Meanwhile, Ally has accessed the ABS market via its two auto ABS trusts. Ally Master Owner Trust has thus far issued three offerings this year while Ally Auto Receivables Trust has come to market with two auto-backed transactions so far in 2010, according to the ASR Scorecards database.

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