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TD Bank Group to buy Chrysler Financial

  |   Dec. 21, 2010 at 11:26 AM
TORONTO, Dec. 21 (UPI) -- TD Bank Group said Tuesday it had agreed to purchase Chrysler Financial for $6.3 billion, moving solidly to extend its U.S. auto lending.

Under the agreement reached with Cerberus Capital Management L.P., Toronto-Dominion Bank, the firm's U.S. operation, will acquire Chrysler Financial in the United States, while TD will purchase Chrysler Financial in Canada, the firm said in a statement.

The purchase price includes assets worth $5.9 billion and an additional "$400 million in goodwill," the statement said.

The deal includes "all of Chrysler Financial's processes and technology as well as its existing portfolio of real estate assets on both sides of the border."

TD Bank Group President and Chief Executive Officer Ed Clark said the purchase "will allow us to leverage our lending expertise … to expand our presence in a large North American market with tremendous potential upside."

Chrysler Financial serves dealerships and about 1 million consumers with automobile loans. Among its gains, TD Bank Group said the business "could generate a return on invested capital of approximately 20 percent in three to four years once it is operating at a steady run rate for target originations."

"Because we're well-capitalized and a leading deposit franchise, we've been looking for opportunities to accelerate the growth of our loan book. This acquisition gives us that opportunity and also diversifies our lending portfolio," Clark said.

Topics: Ed Clark
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