Toronto-Dominion Clinches Deal for Chrysler Financial
PORTLAND, ME - Toronto-Dominion Bank agreed to buy Chrysler Financial from the private equity firm Cerberus Capital Management for $6.3 billion.
PORTLAND, ME - Toronto-Dominion Bank agreed to buy Chrysler Financial from the private equity firm Cerberus Capital Management for $6.3 billion.
The deal comprises “net assets of $5.9 billion and approximately $400 million in goodwill,” according to the company’s statement.
TD Bank, Toronto-Dominion’s United States subsidiary, will acquire Chrysler Financial in the United States, and Toronto-Dominion will acquire Chrysler Financial in Canada.
“This transaction represents a unique opportunity to purchase a great organic growth platform at an attractive price,” said Ed Clark, chief executive of Toronto-Dominion. “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.”
Even after Cerberus agreed to cede most or all of its stakes in GMAC — now known as Ally Financial — and Chrysler, it sought to hold onto Chrysler Financial as a relatively strong finance company. Unlike GMAC, Chrysler Financial was not weighed down by soured mortgages. Auto loans have largely held their value.
Chrysler Financial no longer provides financing to Chrysler, which now relies on GMAC for much of its auto loan financing.
A takeover of Chrysler Financial would also be the latest in a United States expansion by Canadian banks, which emerged largely unharmed from the market turmoil of 2008. With strong balance sheets, they have turned to acquisitions abroad to grow.
Toronto-Dominion, the product of a 1955 merger of two Canadian banks, has sought to acquire a variety of regional lenders in recent years to expand abroad.
The bank has struck more than a half-dozen deals since 2006, adding to its presence in the Southeast and Florida. Its largest acquisition was its $8.7 billion takeover of Commerce Bancorp in 2007. That takeover more than doubled Toronto-Dominion’s presence in the United States.
Toronto-Dominion was advised by Goldman Sachs and the law firm Simpson Thacher & Bartlett. Cerberus was advised by JPMorgan Chase, Citigroup and the law firm Schulte Roth & Zabel.
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