Industry News

GM to sell controlling interest in GMAC

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General Motors will sell a 51 percent stake in General Motors Acceptance Corp., better known as GMAC, to a consortium led by Cerberus Capital Management for approximately $14 billion in cash over three years, with an estimated $10 billion by closing, GM said today. GMAC is the troubled auto manufacturer's finance arm, and is its most profitable unit. GM said the consortium buying the stake includes Cerberus Capital, a private investment firm, and includes Citigroup and Aozora Bank Ltd. GMAC's subsidiaries include GMAC Insurance and GMAC Mortgage. GMAC Mortgage originates single-family and commercial real estate loans, invests in mortgage-backed securities, and packages nonconforming single-family home loans for sale to investors. The deal ends six months of negotiations but the amount paid by Cerberus is less than the amount analysts had expected, media accounts said. "The transaction strengthens GMAC's ability to support GM's automotive operations, improves GMAC's access to cost-eff...