General Motors said Wednesday that it will buy Ally Financial’s operations in Europe, China and Latin America as it tries to build a global finance unit to make low-interest car loans and boost sales.
The auto giant’s U.S. loan business, GM Financial, will pay $4.25 billion for the Ally assets, helping GM to better compete in markets where other automakers already have their own loan operations. Automakers with their own finance arms often subsidize loans and leases to boost sales.
The deal is expected to close next year. Ally will get a $550 million premium over the book value of the assets, which was $3.7 billion in the third quarter, Ally said.