photo credit: mrkumm[/caption]On Thursday General Motors announced that it is intending to acquire the auto finance company AmeriCredit (NYSE: ACF) in an all-cash transaction. GM wants to buy AmeriCredit for $3.5 billion based on a share value of $24.50. That is a 24% premium over ACF's closing price of $19.70 Wednesday.
GM hopes to get an edge in regards to financing vehicles, especially as the demand for non-prime leasing and financing is increasing.
"This acquisition supports our efforts to design, build and sell the world's best vehicles by expanding the financing options we can offer to consumers who want to buy GM vehicles," said GM chairman and CEO, Ed Whitacre as reported by dailyfinance.com. "Adding AmeriCredit to our team will improve our competitiveness in auto financing offerings, and I am very pleased to have them on board."
After entering into bankruptcy last year, GM has been working together with ACF. Together they launched a non-prime financing program which helped to sell more cars to lower income demographics. About 4,000 GM dealers are already working with AmeriCredit.
This intend of GM to buy ACF has already invited trouble: -Kendall Law Group, a national securities firm led by a former federal judge and a former U.S. Attorney, is investigating AmeriCredit Corp. for shareholders in connection with the proposed acquisition of the company by General Motors. The law firm tries to prove that ACF entered into the agreement without properly shopping for a deal that would provide better value for shareholders.
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