Toronto-Dominion Bank to acquire Chrysler Financial for $6.3 billion
21 Dec 2010
Toronto-Dominion Bank, the second largest bank in Canada by market capitalisation and deposits, today said that it would buy Chrysler Financial from private equity firm Cerberus Capital Management, for $6.3 billion in cash.
The purchase includes net assets worth $5.9 billion and approximately $400 million in goodwill.
The acquisition will give Toronto-Dominion all of Chrysler Financial's processes and technology as well as its existing portfolio of retail assets in the US and Canada.
With about 1,850 employees in Canada and in the US, Chrysler Financial is one of the largest auto financing firms in North America having more than 45 years of operating experience in the consumer and commercial auto financing market.
In the US, the automotive finance industry is the second largest non-mortgage consumer asset class after credit cards. It comprises about $650-700 billion in outstanding receivables and $350-400 billion in annual originations on a normalised basis.
Post transaction, the business - combined with Toronto-Dominion's current platforms in Canada and the US - will be positioned as a top five bank-owned auto lenders in North America.
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