TD Bank to buy Chrysler Financial for $6.3bn

Car dealership
Image caption Chrysler financial provides loans to buy cars

Canada's Toronto-Dominion Bank (TD) has agreed a deal to buy Chrysler Financial from private equity firm Cerberus Capital Management for $6.3bn (£4.1bn).

The price includes $5.9bn for the company's assets and $400m of goodwill.

TD boss Ed Clark said the deal would make the combined firm one of the "top five auto lenders" in the US.

Chrysler Financial is the former lending arm of the US carmaker that was bailed out by the US government last year and is now owned by Italy's Fiat.

'Joining forces'

"This transaction represents a unique opportunity to purchase a great organic growth platform at an attractive price," Mr Clark said.

"Chrysler Financial is a well-run business with the capacity for significantly higher returns over the next several years."

He said there was "tremendous upside potential" in the North American market.

Tom Gilman, chief executive of Chrysler Financial, said: "Joining forces with TD will benefit both our customers and our dealer network."

Cerberus lost control of Chrysler - along with General Motors and Ford one of the so-called Detroit Three US car giants - when the carmaker went into bankruptcy protection last year after sales slumped during the global downturn.

However, it kept control of the carmaker's finance arm.

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