Ally near deal to sell Canadian business to RBC: source
By Jessica Toonkel and Rick Rothacker
(Reuters) - Ally Financial Inc, the U.S. auto lender 74 percent owned by the U.S. Treasury, is near a deal to sell its Canadian operations to Royal Bank of Canada (RY.TO: Quote) for more than $4 billion, according to a source familiar with the deal.
A deal could be announced as early as Monday, but talks are fluid, the source said. RBC has been competing with another Canadian bank, Toronto Dominion Bank (TD.TO: Quote), in the auction, the source said.
CNBC first reported the deal talks on Monday morning.
Ally, the former auto lending arm of General Motors Co (GM.N: Quote), announced plans in May to sell its international operations in an effort to speed up repayment of government bailouts it received during the financial crisis.
The lender last week agreed to sell its Mexican insurance business to insurance and reinsurance company ACE Ltd (ACE.N: Quote) for $865 million in cash.
Ally, RBC and Toronto Dominion declined to comment.
Ally's international operations in Europe, Canada, Latin America and Mexico have drawn interest from more than 30 bidders, including banks and GM, the source said. Bidders are interested both in regions as well as just buying individual country businesses, the source said. That process is "in the top of the ninth inning," and could be completed shortly, the source said.
The international businesses totaled $31 billion in assets and $7.6 in book value, according to a company presentation in August. The Canadian operations equaled about 45 percent of international assets, the company said in May. Continued...