Toronto-Dominion Bank has agreed to buy Chrysler Financial from private equity firm Cerberus Capital Management for $6.3 billion, the companies said on Tuesday.
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Chrysler Financial used to be Chrysler's financial services arm. |
TD, Canada's No. 2 bank, said the purchase is comprised of net assets of $5.9 billion and about $400 million in goodwill.
TD said it does not intend to issue common equity in connection with the deal.
A deal would help Cerberus recoup a big chunk of its disastrous $7.4 billion purchase of Chrysler Group, the automaker. It would also help TD add to its extensive U.S. East Coast assets.
Chrysler Financial, the former lending arm of the automaker, had its operations reduced as part of a U.S. government-sponsored restructuring of Chrysler and General Motors [GM 33.76 --- UNCH (0) 
] last year.
] last year. Cerberus, which bought Chrysler in 2007, lost control of the automaker during its restructuring. It held on to the financing company.
Ally Financial, the auto and mortgage lender formerly known as GMAC, took over some of the unit's operations in connection with the restructuring.
The deal is the latest in a series of foreign asset purchases by big Canadian banks, which exited the financial crisis in stronger shape than most rivals, and have been seeking to capitalize by buying up assets.
Last week, Canada's Bank of Montreal agreed to buy troubled Wisconsin lender Marshall & Ilsley for $4.1 billion in stock.
TD's U.S. operations include the East Coast TD Bank network, and it owns just under half of online broker TD Ameritrade. TD has made small U.S. retail bank acquisitions in the last two years and bought Commerce Bancorp for $7.7 billion in 2007.
